Civic Crowdfunding and Local Government: An Examination into Projects, Scope, and Implications for Local Government

Transcription

1 Old Dominion University ODU Digital Commons Public Service Theses & Dissertations School of Public Service Fall 2016 Civic Crowdfunding and Local Government: An Examination into Projects, Scope, and Implications for Local Government Martin Mayer Old Dominion University Follow this and additional works at: Part of the Political Science Commons, Public Administration Commons, and the Public Policy Commons Recommended Citation Mayer, Martin, "Civic Crowdfunding and Local Government: An Examination into Projects, Scope, and Implications for Local Government" (2016). Public Service Theses & Dissertations This Dissertation is brought to you for free and open access by the School of Public Service at ODU Digital Commons. It has been accepted for inclusion in Public Service Theses & Dissertations by an authorized administrator of ODU Digital Commons. For more information, please contact

2 CIVIC CROWDFUNDING AND LOCAL GOVERNMENT: AN EXAMINATION INTO PROJECTS, SCOPE, AND IMPLICATIONS FOR LOCAL GOVERNMENT by Martin Mayer B.A. May 2008, The University of Akron M.P.A. May 2010, The University of Akron A Dissertation Submitted to the Faculty of Old Dominion University in Partial Fulfillment of the Requirements for the Degree of DOCTOR OF PHILOSOPHY SCHOOL OF PUBLIC SERVICE OLD DOMINION UNIVERSITY December 2016 Approved by: Dr. Meagan Jordan (Director) Dr. David Chapman (Member) Dr. Ben Clark (Member)

3 ABSTRACT CIVIC CROWDFUNDING AND LOCAL GOVERNMENT: AN EXAMINATION INTO PROJECTS, SCOPE, AND IMPLICATIONS FOR LOCAL GOVERNMENT Martin Mayer Old Dominion University, 2016 Director: Dr. Meagan Jordan Recently, through the development of online technology, civic crowdfunding has emerged as a way in which to connect citizens to community problems and projects. The growth and early success of the field underscores the importance of better understanding civic crowdfunding, how it works, and how it may impact local government. Through a mixedmethods design, this study investigates the growing field of civic crowdfunding in an effort to better understand what types of projects are proposed, where they are proposed, and why some civic crowdfunding proposals may be successful while others are not. Strengths and challenges of civic crowdfunding are discussed, as well as implications for participants, local government, and the growth of the field. The results highlight several different types of projects being proposed on civic crowdfunding platforms with the most prevalent being sustainability projects. These projects are generally low in cost, non-controversial, and visible within the proposing community. The results further reveal money and engagement to be the most important factors in determining project success. The lower the project goal, the more money raised, and the more individuals participating in a given campaign all have significant impacts on whether a project proposal achieves its funding goal. Finally, implications are discussed and ideas for future research are offered.

4 Copyright, 2016, Martin Mayer, All Rights Reserved. iii

5 iv ACKNOWLEDGMENTS There are several people who have contributed to the successful completion of this dissertation. First and foremost I would like to thank my wife, Julie, and daughter, Addison, as well as my parents for their support, encouragement, and patience throughout this process. I extend sincere gratitude to my dissertation chair, Dr. Meagan Jordan, for her tireless support and guidance. I also want to thank the members of my committee, Dr. David Chapman, and Dr. Ben Clark for all of their help and suggestions throughout the development of this manuscript.

6 v TABLE OF CONTENTS LIST OF TABLES. viii LIST OF FIGURES..ix CHAPTER ONE: INTRODUCTION... 1 Research Questions... 4 Project Type... 4 Project Success... 4 Justification for the Study... 5 Data and Analysis... 7 Summary... 8 CHAPTER TWO: LITERATURE REVIEW... 9 The Wisdom of the Crowd... 9 Collective Intelligence and Public Value Crowdsourcing and Crowdfunding Defined Crowdfunding, a History The Academic Development of Civic Crowdfunding Early Crowdsourcing Literature The Beginning of Private Sector Crowdfunding Research Civic Crowdfunding as a Tool for Local Government The New Public Service The New Public Service and Civic Crowdfunding Citizen Engagement Democratic Citizenship Incorporating Multiple Actors and Sectors Contemporary Challenges for Local Government Civic Crowdfunding, Local Government, and the Community Strengths Concerns Implications For Local Government... 49

7 vi For Citizens The Characteristics of a Successful Civic Crowdfunding Campaign Wide Spread Project Appeal Multifaceted Marketing Approach Mutual Awareness Mutual Benefit Participation Real Time Updates Rewards Visible Problems CHAPTER THREE: METHODOLOGY Research Methodology Qualitative Analysis Methodology Research Question and Hypotheses Data Collection Overview of the Qualitative Analysis Quantitative Analysis Methodology Research Question and Hypotheses Data Collection Overview of Quantitative Analysis Limitations and Delimitations CHAPTER FOUR: RESEARCH RESULTS AND FINDINGS Qualitative Analysis Results Overview by Platform Project Proposal Categories Platforms Community Demographics Characteristics of Success Project Components Project Type Results Quantitative Analysis Results Project Success Results

8 vii CHAPTER FIVE: CONCLUSIONS Summary of the Research Relation to the Literature Limitations and Future Research Contributions to the Literature Contributions to the Field of Public Administration REFERENCES APPENDIX A VITA

9 viii LIST OF TABLES Table 1 - Overview of Generic and Civic Crowdfunding Table 2 - Variables and Measures Table 3 - Descriptive Statistics Table 4 - Platform Demographics Table 5 - Project Type Descriptions and Examples Table 6 - Projects by Category Table 7 - Category by Platform Table 8 - Successful Projects by Platform Table 9 - Regional Project Success Table 10 - Success Rate by Population Table 11 - Success Rate by Median Household Income Table 12 - Success Rate by Poverty Rate within Proposal Jurisdictions Table 13 - The Usage and Success of Project Characteristics Table 14 - The Usage and Success of Select Project Components Table 15 - Success Rate by Number of Donors Table 16 - Success Rate by Proposal Request Amount Table 17 - Project Proposal Pricing Dispersion in Projects Proposals Under $5, Table 18 - Success Rate by Monies Raised Table 19 - Category Success Rates Table 20 - OLS Regression Analysis Highlighting the Impact of Explanatory Variables on the Overall Percentage Funded of a Project Proposal Table 21 - Logistic Regression Analysis Highlighting the Impact of Explanatory Variables on the Successfully Funded Project Proposal

10 ix LIST OF FIGURES Figure 1 - Full Model(s) and Equation Figure 2 - Geographic Distribution of Project Proposals and Successes Figure 3 - Donor Success Rate Figure 4 - Under $5K Project Success Figure 5 - Proposal Distribution

11 1 CHAPTER 1 INTRODUCTION Local governments today face many challenges regarding public finance, service delivery, and civic engagement that are both new and unique. Many of these issues have either been brought on or magnified in the aftermath of the Great Recession and now pose a number of difficult and necessary questions for local government involving issues that are likely to hang around long after the economic recovery (Martin, Levey, & Cawley, 2012). Should local governments continue the recent trend toward privatization of services, even amidst questionable success, or should it reassert itself with new models for regional integration, public finance, and service delivery that emphasize a public role? (Warner, 2010, p. 145). Furthermore, can local government overcome the cultural inertia that has seemingly plagued government innovation in the digital age and design mechanisms to ensure public value amidst new and emerging challenges? Technological innovations such as Facebook, Twitter, and a series of mobile applications are connecting citizens to their public servants in a number of new and exciting ways; making these questions all the more timely and important (Bryson, Crosby, & Bloomberg, 2014). At the same time there has been a growing movement within the country aimed at greater representation and inclusiveness for all individuals within the process of government. The role of government thus becomes one where the public interest in tantamount and the achievement of values such as fairness and equity become the primary purpose (J. Denhardt & Denhardt, 2003). This refounding movement has been termed the New Public Service. This study looks at this intersection of representativeness and technological innovation by examining civic crowdfunding, a promising recent innovation, through the lens of the New Public Service. Civic crowdfunding and its role as a service delivery mechanism has shown potential to increase public

12 2 involvement, create public value, and also address budgetary and finance issues that have plagued local government in recent years (Davies, 2014). This research provides an overview of the field of civic crowdfunding and explains what types of projects are undertaken, what projects are successfully funded, and also what factors lead to successful projects. By examining civic crowdfunding through the lens of the New Public Service, relevant concepts can be applied in order to provide insight into representativeness, engagement, public interest and the creation of public value while also highlighting how these concepts work within the domain of civic crowdfunding and emergent tools and technologies. Civic crowdfunding is a sub-type of crowdfunding through which citizens, in collaboration with government, fund projects providing a community service (Stiver, Barroca, Minocha, Richards, & Roberts, 2014, p. 2). Civic crowdfunding can be conceptualized as the crowdsourcing of fiscal resources to address a particular community need. Crowdfunding allows founders to fund their efforts by drawing on relatively small contributions from a relatively large number of individuals using the internet, without standard financial intermediaries (Mollick, 2014, p. 2). To date, crowdfunding has been a predominantly privatesector activity, in which ideas and projects are pitched to potential investors through online hubs that circumvent the traditional bank/investor process. The private sector crowdfunding described above often hinges on the exchange of a tangible good in return for a donors investment. These types of projects provide incentive for donors through the promise of tangible rewards. Platforms such as GoFundMe, Kickstarter, and IndieGoGo offer networks in which individuals can fundraise project development as well as personal and non-profit causes. Ultimately the success of the project is determined by the public s willingness to invest in it.

13 3 The field and the literature are very much in their infancy at this point and attempts at theoretical development are ongoing. This work draws primarily from the domain of New Public Service to provide insight and explanation into civic crowdfunding as a new model of engagement and resource development. The New Public Service calls for a reaffirmation of democratic values through a series of principles organized around the public interest and democratic citizenship (J. Denhardt & Denhardt, 2003). Public administrators should strive for greater civic engagement through the use of tools, practice, and process (Bingham, Nabatchi, & O'Leary, 2005). Civic crowdfunding can be viewed as a product of or further response to network governance and a tool that has the potential to better connect citizens with government and create public value. As crowdfunding has become more successful over the last few years, local governments have begun to consider it as a potential mechanism by which to fund projects and generate resources that may not otherwise be possible. The term crowdfunding generally refers to private sector enterprise; civic crowdfunding on the other hand is an offshoot that focuses predominantly on community improvement and civic minded projects, proposals can come from any number of actors but the common theme is the development of public assets and creation of public value. Proponents argue that civic crowdfunding is a better, more effective way to connect citizens with government in the 21 st century (Davies, 2014). Not only do such platforms increase democratic citizenship and community, they also have the potential to help curb budget shortfalls in cities across the country. Despite the increasing prevalence and potential utility, there remains little attention paid to civic crowdfunding and its viability as an alternative funding mechanism and resource generator for local government in the academic literature.

14 4 The purpose of this study is to examine the role of civic crowdfunding in public administration and local government in an attempt to better understand the types of projects that ultimately get funded, where the money comes from, and what makes some projects successful while others fail. Collectively this work contributes to the small, but growing literature on civic crowdfunding, and could have potential positive implications for scholars who are interested in emergent technology and local government, and also for practitioners who are focused on the utilization and viability of crowdfunding as a potential revenue and resource generator. Through the lens of New Public Service, this work also provides insight into how new models of engagement, focusing on responsiveness, public interest, and community inform and advance the knowledge of the field of public administration. Research Questions In an attempt to better understand the scope, and potential utility of civic crowdfunding projects for local government this study asks the following research questions regarding project type and project success: Project Type: What projects do conveners attempt to fund through civic crowdfunding platforms? What type of projects actually get funded? This refers specifically to the different project categories proposed on each platform. For example, a proposal may be for an infrastructure improvement, an after school program, or a neighborhood cleanup; the possibilities are many, but they can generally be categorized into a select grouping explaining the general purpose. This question not only provides information on the specific projects proposed and funded but also offers insight into the public interest and community responsiveness. Project Success: Defining success as a fully funded project, what factors influence project success? What are the characteristics of both funded and unfunded projects? Answering

15 5 the question of project success provides critical information for those interested in a crowdfunding initiative while also revealing information on the interests and preferences of the public. Justification for the Study To date there has been slow but steadily growing attention in the academic literature given to the subject of crowdfunding; however, when looking at civic crowdfunding specifically this number shrinks considerably. In terms of the existing literature, few have examined crowdfunding from a local government and policy perspective. Much of what has been done is typically small observational case-studies with little theoretical grounding. Some of the reason for this can be attributed to both the newness of the field and also the general diversity and difficulty in gathering empirical data. A recent study (and one of the first to gather data on civic crowdfunding projects) defined civic crowdfunding projects as something that may involve either directly or indirectly, the use of government funds, assets or sponsorship, which may include the development of public assets (Davies, 2014, p. 17). This definition illustrates the complexity and inherent difficulty in defining and differentiating civic crowdfunding projects (and the role of government) from other more general projects. As Davies (2014) highlights, many civic crowdfunding projects are not directly sponsored by local government or its representatives but are termed as such for the development of public assets and public value that they may create. This analysis focuses on these types of projects which directly or indirectly create public value. To date, Davies (2014) study has been the most comprehensive examination into civic crowdfunding, particularly the potential benefits and challenges associated with it. Davies (2014) collected data across seven general and civic crowdfunding platforms in the United States, South

16 6 America, and Europe through platform categorization tags. This included projects convened by individuals, community organizations, non-profits, and local government in an attempt to begin to draw conclusions about project characteristics and opportunities and challenges for civic crowdfunding. Others such as Stiver, Barroca, Minocha, Richards, and Roberts (2014) as well as Zuckerman (2012) have outlined the field, highlighting strengths and weaknesses while laying out a course for future research. This study builds and expands on the work of Davies (2014) and others by examining new theoretical angles in an effort to further explain civic crowdfunding success. Davies (2014) examined platforms across the world, and the focus of this study is uniquely American, offering additional insight into how civic crowdfunding works within the American context. This study also further examines project success than has been previously done by Davies or others. Davies, in perhaps the most thorough examination to date, focused specifically on the size and scope of the field, offering general descriptive statistics and characteristics followed by a series of edge case studies. This study attempts to place the burgeoning field within the public administration literature, and offers a more substantial quantitative analysis and evaluation of the drivers of project succes than has previously been done. This study examines civic crowdfunding through both a project proposal content analysis as well as a corresponding quantitative analysis in order to both provide an in-depth overview of the field, as well as a look at the specific drivers of project success, which has not been addressed on this scale previously. These methods allow for both a number of empirical findings that impact civic crowdfunding and also have broader implications related to new models of engagement and responsiveness and how they fit within the New Public Service and in the field of public administration. Focusing solely on the American context this study examines projects

17 7 convened by community organizations, non-profits, and local government, as well as those that have partnered with public officials and/or their representatives. By gaining insight into what makes civic crowdfunding projects successful and better understanding the process and the contribution of funds we can better understand and articulate the strengths of successfully funded projects. This knowledge helps to further the academic and professional development of civic crowdfunding. First by examining theoretical linkages to the New Public Service and the field of public administration it provides insight into new modes of representation for the field and not only how it can be informed by existing theory but also how it informs the field as well. Secondly this research provides practitioners information on how to better utilize civic crowdfunding all the while reducing the potential for waste and inefficiency. Data and Analysis There are no known databases or available existing datasets examining civic crowdfunding. All data are collected directly from the original source platforms and only includes completed projects, specifically projects that have run the course of their funding proposal deadline, including both successfully funded and unsuccessful projects. There are 226 projects that meet the criteria and have been analyzed from the two primary civic crowdfunding platforms, Citizinvestor and ioby. Despite their differences, each platform requires thorough descriptions of the project proposals, goals, timeframes, and other pertinent information. Content analysis is performed on the platform data to answer the questions of project type and project success. In addition to the content analysis, a quantitative regression analysis is employed to better answer the second research question, the factors influencing project success. The unit of analysis in each case is the specific and individual civic crowdfunding projects.

18 8 Summary As crowdfunding continues to grow in scope and depth across the country the implications and promise for both government and citizens are many. When done successfully, civic crowdfunding has the potential to be an alternative service delivery mechanism for government; one that has the ability to make government more responsive, give citizens greater voice, and fund a number of projects that might otherwise fall by the wayside. This research contributes to the growing field by attempting to explain what types of projects are undertaken and what projects are generally funded and whether certain factors lead to successful projects. Potential implications include the creation of public value, increased engagement, and additional insight into how new models of technological innovation may impact local government service delivery. The next section of this work provides a review of the literature, highlighting the research problem, detailing the background and development of civic crowdfunding, and also the potential outcomes and implications for government and stakeholders alike. The New Public Service literature, based on the foundation of democratic citizenship is then introduced to provide the underpinning of the theoretical framework used to structure and guide the analysis. A discussion of contemporary challenges for local government follows as well as the potential benefits of civic crowdfunding. Finally, implications are discussed for both administrators and individuals participating in a civic crowdfunding project.

19 9 CHAPTER TWO LITERATURE REVIEW With the continued success of crowdfunding platforms, including IndieGoGo and Kickstarter over the last few years, there has been a growing trend in applying the private-sector crowdfunding ideals to public-sector problems. While this innovation has been significant, the potential of utilizing technology to improve responsiveness and service delivery is just beginning to be realized in the public sector (Tapscott & Williams, 2008). Civic crowdfunding has the potential to increase transparency and responsiveness while also upgrading infrastructure and providing community benefit (Brito, 2008; Davies, 2014). This section provides background and context through a review of the extant crowdfunding literature. New Public Service as well as additional literature on civic engagement, public value, and network governance are then introduced and incorporated as the theoretical underpinnings that inform and ground the study in the field of public administration. The Wisdom of the Crowd The wisdom of the crowd, as James Surowiecki (2005) explains, is the occurrence where under particular circumstances, group intelligence is greater than that of even the smartest members of the crowd. Brabham (2009) refers to the wisdom of the crowd as the result of crowdsourcing, a way in which to utilize the resources of the crowd to create value. A predominantly private sector concept increasingly used in the public sector, crowdsourcing provides a number of potential benefits for public administrators. Crowdsourcing data and information are made possible by the growth of information technology, allowing for the leveraging of the wisdom and resources of the crowd through the linkage of existing institutions

20 10 with democratic and collaborative governance processes (Bryson et al., 2014; Tapscott & Williams, 2008). In an increasingly networked society, collective decision making is imperative (Ansell & Gash, 2007; Conley & Moote, 2003; Leach, Pelkey, & Sabatier, 2002; Margerum, 2002; Thomson, Perry, & Miller, 2009). Collective decision making is essentially the process of group decision making; the old adage two heads are better than one applies here. Having structures in place to promote collective decision making can serve to reduce the risk of fraud and negligence, promote transparency and representation, and simultaneously increase cooperation and participation (Ansell & Gash, 2007; Leach et al., 2002; McNamara, 2012; Thomson et al., 2009). In addition, utilizing the wisdom of the crowd for collective decision making can also increase efficiency while reducing cost (Schwienbacher & Larralde, 2010). Surowiecki (2005) asserts that group intelligence is almost always superior to that of an individual. While crowdfunding has the potential to leverage group intelligence in a positive manner (much more so in civic crowdfunding projects) in both project convening and funding phases, it can be complicated. Crowdsourcing is a broad term that implies the use of the crowd s wisdom or resources to address an issue. Crowdfunding on the other hand is focused solely on connecting the financial resources of the crowd to a particular issue or need. The two concepts can vary substantially, yet the common theme between both is the reliance on the resources of the crowd. If designed properly, crowdsourcing can be more democratic due to the lower cost of entry, whereas to participate in a crowdfunding campaign, an interested individual must have available and disposable capital and perhaps little else. In crowdfunding campaigns, other factors come into play such as marketing and technological savvy that can impact influence and support.

21 11 Crowdfunding can be a closed environment where other than collectively funding a proposal there may be little other collective impact. Civic crowdfunding, as a traditionally more local, ground-level process does, offer additional ways to utilize collective decision making; yet still it is not guaranteed and requires substantial foresight by convening members in order to design proper feedback channels and involvement opportunities in order to take advantage of the crowds collective wisdom. Ultimately both crowdsourcing and crowdfunding are about utilizing the resources of the crowd, the challenge, however, for civic crowdfunding is how to best incorporate the more democratic principles of crowdsourcing and create a more open environment in which citizens can participate. Collective Intelligence and Public Value The key to utilizing the crowd s collective intelligence to achieve high level system performance often hinges on the presence of four characteristics within the participants: diversity of opinion, independence, decentralization, and aggregation (Surowiecki, 2005). Collectively these characteristics help to ensure a well-balanced group with high collective intelligence (Surowiecki, 2005) that are better able to solve complex problems (Howe, 2008). The first characteristic, diversity of opinion highlights the weighing and consideration of all possible solutions to a problem, not simply the status quo in an effort to maximize a groups collective intelligence (Surowiecki, 2005). The second characteristic, independence is important to effective collective decision making for two primary reasons. Independence mitigates the potential that errors in individual judgment will become systemic while also increasing the likelihood for new and different perspective among stakeholders (Surowiecki, 2005). The third characteristic of high level system performance is decentralization. Decentralization affords substantial autonomy and responsibility to individual actors. Decentralization further

22 12 encourages independence and specialization while still allowing people to coordinate their activities and solve difficult problems (p. 71). The fourth and final characteristic of high level system performance in group setting is aggregation. Aggregation can increase efficiency by offering more complete information than may otherwise be available to the individual. Characteristics traditionally equated with productive hierarchical organizations, such as structure, chain of command, authority, cooperation, and cognition, can serve to limit creativity and inhibit the wisdom of the crowd in large networked activities (Surowiecki, 2005). As technology and the various growth and stages of the internet have continued to evolve, it has had a profound effect in reshaping traditional business organization and structure over the last two decades. Now government and other more deeply-ingrained institutions are beginning to show signs of adopting and embracing the possibilities and utilizing the crowd in large and loosely drawn collaborative networks (Bryson et al., 2014). Unlike in traditional organizational structure, many of these networks rely on a number of potential contingencies (Hartley, Sørensen, & Torfing, 2013). Such contingencies take the focus beyond solely efficiencies in innovation processes toward thinking about the viability and appropriateness of particular innovation strategies (Hartley et al., 2013, p. 828). A number of factors have contributed to this; chief among them is the growth of the internet as not just a platform for collaborative thought but also a facilitator of such thinking (Brabham, 2008a). By articulating the interests of the public (something that technology has increasingly allowed for) in a fair and representative manner, administrators are able to achieve what Mark Moore (1995) terms as public value. Public value success and the creation of public value are things that should guide administrative decision making through more responsive and engaging efforts to better provide services demanded by the public (Moore, 1995). Public value can be

23 13 thought of as the general equivalent to stakeholder value for the public sector, in which the articulation of the collective interest of the public determines the course of the public sector (Moore, 1995). Public value can be complicated and difficult to measure and assess in a timely manner. As a result, public value is often examined broadly; this is in direct contrast with economic values, which have traditionally driven conversations of resource allocation (Bozeman, 2007). The universe of public values is complex and dynamic, made up of seven core nodal values (in addition to many other less central themes): human dignity, sustainability, citizen involvement, openness, secrecy, integrity, and robustness (Jørgensen, & Bozeman, 2007). Collectively these values make up the core components of public value and also create a number of interesting challenges for organizational design due to their conflicting and contradictory nature (Jørgensen, & Bozeman, 2007). In the 21 st century, creating public value involves more than just the public sector; it requires strong leadership willing to facilitate collaborative partnerships with the business and non-profit communities. It involves shared resources and letting each sector highlight strengths while mitigating weaknesses. For the public sector, this includes providing the regulatory framework and flexibility needed to make things happen, the private sector providing the investment capital and expertise to develop projects, and the nonprofit sector providing the institutional attractions and creative energy to draw people to a place (Fisher, 2014, p. 463). Size and diversity of the population are often critical to network (Howe, 2008) and public value success. In attracting large diverse networks of stakeholders, high levels of social capital are imperative (Ansell & Gash, 2007; Bryson, Crosby, & Middleton-Stone, 2006; Ferreyra & Beard, 2007; Gray, 1985; Innes & Booher, 2003; Mandarano, 2008). Diversity is a trait of the crowd that should be actively sought; the larger and more diverse the network of stakeholders,

24 14 the better able the crowd is to come up with appropriate aggregate solutions for the problem (Ansell & Gash, 2007; Brabham, 2009, 2010; Gray, 1989; Seltzer & Mahmoudi, 2012; Surowiecki, 2005). Creating public value and the articulation of the public interest should not be viewed solely from a macro local government level or as an all or nothing process. The efforts of public managers and other civil servants, such as the librarian according to Moore s (1995), highlight how each individual administrator can create public value within their sphere of influence by being more democratic, transparent, and ultimately creative in their service of the public. Technology has increasingly made this easier through a number of platforms and outlets that bring together opinion, resources, and other materials that can help to create better targeted and ultimately more efficient offerings (Quittner, 2012). Despite the potential and increasing prevalence of crowdsourcing information, the wisdom of the crowd is something that Surowiecki (2005) notes is often misunderstood or underappreciated. For all of the positives attributed to collective intelligence and the wisdom of the crowd, these new facilitative mechanisms also have the potential to discriminate and oppress in ways not previously possible (Brabham, 2008a). This can lead to what Bozeman (2002) terms as public value failure; specifically in the case of crowdsourcing, when the mechanisms for value aggregation are compromised. Bozeman s (2002) definition highlights the breakdown or lack of sufficient structures and processes necessary to ensure the integrity of the process, information, and true intent of the public resulting in public value failure. In order to protect against this threat and others Clark, Zingale, Logan, and Brudney (2016) caution that a number of measures must be taken before utilizing crowdsourcing as a component of policymaking. These include employing a healthy dose of skepticism and understanding the crowd can and will be wrong;

25 15 depoliticizing the crowdsourcing environment through greater efforts at transparency; and overcoming institutional bias in a manner that allows for the organization to best take advantage of the crowd s wisdom. Ultimately public value failure is a legitimate concern in the provision of goods and services through the aggregation of information and resources. Every effort must be made by administrators to ensure the integrity of the process by designing systems and channels that take into account potential concerns and mitigate them to the greatest extent possible. Crowdsourcing and Crowdfunding Defined Conceptually crowdsourcing is a broad term; it implies the leveraging of the tools, talents, and resources of the crowd to solve any number of problems. Crowdfunding, on the other hand, depends less on the knowledge of the people and more specifically on the size of their pocketbook (Howe, 2008). Crowdsourcing applies in many arenas and can take many different forms but ultimately it describes a form of resource allocation. Crowdfunding on the other hand shares one major similarity in that it too is a way in which to aggregate and distribute resources, albeit solely financial ones. In addition, both areas leverage new forms of technology and networks that have grown significantly in size over the past decade, yet neither are exclusively bound by technological advance. Despite the general similarities there are also substantial divides that exist between crowdsourcing and crowdfunding as the text below begins to discuss. Crowdsourcing was first referenced in describing the recent increase in open source, collaborative, technology-driven networks by Jeff Howe in a 2006 article for Wired magazine (Brabham, 2008a, 2013; Kleemann, Voß, & Rieder, 2008; Seltzer & Mahmoudi, 2012). In the article, Howe (2006) described emerging online platforms that were springing up as a way to connect entrepreneurs with a talented and often cheap labor force. In a sense it was a modern extension of outsourcing, only technological innovation now permitted entrepreneurs of any size

26 16 to not just outsource overseas but to crowdsource globally (Howe, 2006). The process described by Howe (2006) of connecting businesses with citizens capable of contributing a variety of resources is one that has grown significantly since the article s initial publication date. It has led to a book deal for Howe and spurred a number of additional experts and innovations in online collaborative platforms. As quickly as crowdsourcing has grown, and as commonplace as it may be now in new media factions, debate remains over what truly constitutes crowdsourcing. Crowdsourcing is built around leveraging the resources of the crowd to meet a certain and specific need or demand whether it be public or private. Although the concept is generally agreed upon, when reviewing the literature it quickly becomes apparent how diverse and ambiguous many crowdsourcing definitions are. In an attempt to address this, Estellés-Arolas and González-Ladrón-de-Guevara (2012) reviewed over 200 documents, which contained over 40 distinct definitions of crowdsourcing. With everything taken into consideration, Estellés- Arolas and González-Ladrón-de-Guevara (2012) concluded that crowdsourcing is: A type of participative online activity in which an individual, an institution, a non-profit organization, or company proposes to a group of individuals of varying knowledge, heterogeneity, and number, via a flexible open call, the voluntary undertaking of a task. The undertaking of the task, of variable complexity and modularity, and in which the crowd should participate bringing their work, money, knowledge and/or experience, always entails mutual benefit. The user will receive the satisfaction of a given type of need, be it economic, social recognition, self-esteem, or the development of individual skills, while the crowdsourcer will obtain and utilize to their advantage what the user has brought to the venture, whose form will depend on the type of activity undertaken (p. 197). The process described above is a mixture of top-down and bottom-up collaboration in which both the organization and the crowd can both have a direct impact on the process and outcomes (Brabham, 2013). The process is spurred by online technological innovations and individual participation; without participation crowdsourcing fails to exist. This is where societal

27 17 need and even marketing can play an important role in the crowdsourcing process. There must be enough incentive to make individual participation worthwhile for the process to work (Seltzer & Mahmoudi, 2012). Crowdsourcing holds many possibilities for innovative product development; however, Seltzer and Mahmoudi (2012) caution that in order to be successful, significant resources need to be dedicated throughout the process by the sponsoring organization and warn that crowdsourcing is not a substitute for other, more formal channels of funding and service delivery (p. 9). In order to best utilize the benefits of crowdsourcing data and information, roles, boundaries, and limitations must be acknowledged and understood by those collecting the data (Clark, Zingale, Logan, & Brudney, 2016). Crowdfunding is about results, an initiative has to sell itself to the funding public; each donation decision regarding a proposal serves as a barometer of public opinion and an indicator of preference revelation. In crowdfunding the primary focus in on raising capital to address whatever issue is being targeted; whereas crowdsourcing focuses on the aggregation of resources that take many different shapes and forms. Crowdfunding also has a greater barrier to entry than crowdsourcing, as capital is the chief requirement to participate. Even then, wealth does not ensure participation, a number of other factors play a role. This goes back to concerns of public value failure raised earlier regarding crowdsourcing in that if a good or service is designed and produced by one segment of society specifically for that segment is it truly non-exclusive. With regard to crowdfunding this concern and the risk for manipulation can be even greater. Despite these concerns, crowdfunding has a number of potential benefits. By gauging citizens willingness to pay for particular goods and services through online platforms, it may offer unique insight beyond the more common measures of

28 18 voting behavior and citizen surveys in explaining citizen participation and preference and the role that technology is increasingly playing upon them (Robbins & Simonsen, 2002). Effective public participation hinges on having an informed citizenry (Jordan, Yusuf, Mayer, Mahar, 2016). Increasingly, the use of technology and digital media sources have become a primary source of information exchange between administrators and citizens; the use and embrace of this media has ushered in a new form of participatory civics (Zuckerman, 2014). One of the characteristics of this version of civics is an interest perhaps a need for participants to see their impact on the issues they re trying to influence (Zuckerman, 2014, p. 156). Both crowdsourcing and crowdfunding fit the bill as new modes of participation that are significantly reliant on technology and digital media; each with the potential to promote more democratic processes by bringing in substantial numbers of the citizenry who may be otherwise disengaged from the traditional political process (Zuckerman, 2014), all the while promoting flatter organizations by bringing individuals directly into the decision making process (Howe, 2008). The great promise and challenge of taking advantage of collaboration and innovation in government lies in how to best empower the citizenry. Collaboration is a challenge and requires substantial foresight (Mayer & Kenter, 2015). In order to properly engage and take advantage of the benefits and resources of the crowd, it ultimately becomes a matter of organizational design (Noveck, 2009). As is the case with any new technology, especially one that has the potential to connect people in ways previously not possible, there is cause for concern. Critics argue that opening up channels of participation would create a whole new class of online lobbyists and campaigns that participate to serve their own financial interests, ultimately increasing

29 19 corruption and further alienating an already weary citizenry (Noveck, 2009, p. 41). Given such concerns great care must be taken to safeguard against such a scenario by implementing measures that through a combination of design, technology, and delegation both serve and empower citizens for the benefit of all (Noveck, 2009). This can include the incorporation of feedback loops, design sessions, digital and face to face interaction and other methods aimed at increasing transparency and involvement. This is in line with what Denhardt and Denhardt (2000) call the true responsibility of public servants: to serve and empower citizens (p. 549). Public institutions should be both founded and maintained through integrity and responsiveness (R. Denhardt & Denhardt, 2000), two traits imperative to successful crowdfunding projects. Increasingly this level of inclusion and the growing transparent connectivity are accomplished through a number of new civic crowdfunding platforms (Agrawal, Catalini, & Goldfarb, 2013; Belleflamme, Lambert, & Schwienbacher, 2013; Griffin, 2012; Hemer, 2011; Mollick, 2014; Schwienbacher & Larralde, 2010). Ultimately, such platforms have the capability to serve as both an alternative to traditional methods of funding services as well as a way in which to increase democratic citizenship and build trust between the citizenry and the government. To date, many view crowdfunding as an extension of crowdsourcing; this can partly be attributed to the developmental nature of the literature; however, this by no means discounts the potential utility and growth taking place within the field today (Hemer, 2011; Schwienbacher & Larralde, 2010). As an emerging field, crowdfunding has often been used synonymously with crowdsourcing, and there have been a number of conflicting attempts to define it (Mollick, 2014). Crowdsourcing is the more broad term that applies when utilizing the resources of the

30 20 crowd to address an issue. Crowdfunding on the other hand is concerned solely with raising capital. Griffin (2013) defines crowdfunding as a means of capital formation that connects entrepreneurs with investors over the internet (p. 1). In this scenario crowdfunding projects are essentially the property of those creating the proposals and offering the service; in civic crowdfunding joint ownership is more common where those proposing the projects often work more closely with funders on final project details and delivery. Belleflamme, Lambert, and Schwienbacher, (2013) define crowdfunding as an open call, essentially through the Internet, for the provision of financial resources either in form of donation or in exchange for some form of reward and/or voting rights in order to support initiatives for specific purposes (p. 8). Much like with the challenges in defining crowdsourcing, many agree on the general parameters: connecting investors to projects through digital networks and the need for tangible and intangible incentives. Where the disagreement comes in is regarding specific attempts to define crowdfunding. The definitional issue is not unlike the famous quote from Supreme Court Justice Stewart when asked to define pornography, to which he responded, I know it when I see it (Jacobellis v. Ohio 378 U.S. 184, 1964). This definitional ambiguity is not new or surprising in a developing field and literature; as Mollick (2014) notes, at this stage, definitions may be more limiting than anything. Ultimately crowdfunding could not exist independently of crowdsourcing. Crowdfunding is an extension of crowdsourcing that looks at one specific resource of the crowd, capital. The recent growth and success of crowdfunding has led to its increased application in a number of different settings. The primary focus of this inquiry is the increasing development of crowdfunding as a potential for alternative funding of service delivery at the local level.

31 21 Crowdfunding, a History Crowdfunding is the process of appealing to and leveraging the resources of the crowd to better achieve a particular goal or project (Brabham, 2013). This is typically done through different online platforms in which organizers can pitch their ideas to a community of potential investors. There are four commonly accepted categories of crowdfunding projects: equity, lending, reward, and donation based (Massolution, 2012). Equity-based crowdfunding, where investors receive some sort of compensation or revenue sharing is the most highly regulated and in turn the least common of the four (Massolution, 2012; Mollick, 2013). Lending-based crowdfunding is when investors receive periodic repayments on their initial investment and is typically the business model of micro-lending organizations such as Kiva (Mollick, 2013). Reward-based crowdfunding is one of the more common methods of crowdfunding and often involves the investor receiving some sort of reward for their investment. This reward can range from any number of potential things, from an exclusive album release in private-sector crowdfunding to opportunities to join in on celebratory ribbon-cutting ceremonies in civic crowdfunding (Massolution, 2012; Mollick, 2013). This is the model typically followed by IndieGoGo and Kickstarter. Finally, donation-based crowdfunding (sometimes referred to as the patronage model) is the most commonly used public sector method. It involves investors donating to a cause without the expectation of compensation in return (Belleflamme, Lambert, & Schwienbacher, 2013; Massolution, 2012; Mollick, 2013). In this conception the incentive is often a sense of pride, compassion, or duty but there is rarely a tangible mutual benefit. This is often the type of civic-minded, citizen-led response that follows natural disasters such as Hurricane Katrina or the Indian Ocean Tsunami. Typically this sort of philanthropic giving is

32 22 done by individuals to support a community benefit (Baeck & Collins, 2013), and as Lambert and Schwienbacher (2010) highlight, social reputation and status seem to be of greater import than financial reward. To date many of the projects proposed on crowdfunding platforms have been privatesector enterprise. Crowdfunding platforms in general have experienced a great deal of success and notoriety over the last few years, evidenced by total revenues increasing from around $1 billion in 2010 to $2.7 billion in 2012 (Esposti, 2012) to over $10 billion in This level of growth coupled with the economic struggles experienced by many localities across the country over the same time has led many cash-strapped local governments to look toward the crowd as a potential means of supplementing their budgets (Fundable, 2015). Civic crowdfunding can be loosely traced back for centuries in America. Much of the public support and financing of the Revolutionary War effort, the funding of the Statue of Liberty pedestal, and the Liberty and War bonds of World War One and Two were crowdfunded. The primary difference with the current incarnation is it is less an issue of pressing need or national emergency as it is one of preference revelation through new and developing technology that while still emerging, offers potential for greater civic engagement and involvement in the business of government (Zuckerman, 2014). One of the most commonly-cited early examples of civic crowdfunding is Joseph Pulitzer s campaign to fund the Statute of Liberty pedestal. When Bartholdi delivered the statue as a gift from the French, America was in the midst of the reconstruction period following the Civil War. This time was characterized by great economic strife that lasted for much of the remainder of the century. As it was, when the statute was delivered unassembled, it remained that way for some time as stakeholders differed on how to best display it and more prominently how to fund the reconstruction and pedestal needed for proper display. Capitalizing on the

33 23 confusion and opportunity, newspaper magnate Joseph Pulitzer took out advertisements in one of his newspapers urging citizens to contribute what they could to help fund and display the monument. With each donation that came in, the donor would be recognized in the subsequent issue of the newspaper. In addition to capitalizing on civic pride, this form of recognition appealed to an individual s extrinsic motivations for supporting the project. Ultimately more than 160,000 individuals contributed donations of at least a dime raising over $100,000 in 1885 (equivalent to more than $2 million in 2015) in a period of less than six months. If launched today, the campaign would be understood as a quintessential crowdfunding campaign: an initiative that uses a single collection point to raise money from a very large pool of donors pledging amounts from pocket change upwards (Davies, 2014, p. 33). Pulitzer s crowdfunding of the Statue of Liberty assembly and pedestal is perhaps one of the largest examples of civic crowdfunding in the country s history (Davies, 2014). In making that statement, it is important to distinguish crowdfunding from traditional donation-based giving. The biggest difference between this example and more common philanthropic giving to campaigns like the United Way or the Red Cross is rooted in the specificity and transparency of the efforts. More traditional fundraising campaigns are often carried out with a broad theme and once the funding period ends, that money is distributed to different causes by the organization as they see fit. In crowdfunding campaigns, there is a much greater degree of transparency because funding requests specifically spell out how all funds will be utilized. This in turn gives potential donors a much more active role (since there are often a number of different ongoing projects) in determining how their money will be spent. This transparency is perhaps one reason why Pulitzer s campaign was so successful; having made more progress in a few months time than had been accomplished in the entire decade prior. Despite the success of Pulitzer s campaign,

34 24 crowdfunding was not viewed as much more than a niche funding strategy until the 1990s with the further advancement of digital technology and the internet (Hemer, 2011). One of the earliest examples of crowdfunding in the digital age comes from the British rock band Marillion. In an effort to appease American fans requesting a United States tour and not wanting to pay the up-front costs of said tour, the band turned to fans to help fund it. By detailing the proposal on their website and reaching out to fans at concerts, through s, and through other avenues, the band was able to raise over $60,000 in just a few months; more than enough to finance the requested tour (Marillion, 2014). Perhaps more impressive is that this happened in 1997 at a time when the internet was in its infancy and social media looked very different than it does today. With the success of Marillion s funding effort other individuals and organizations set out to recreate the band s achievement. First, there was Donors Choose, an online funding platform that connects individuals to teachers and classrooms in need of resources and supplies (Davies, 2014). The platform allows teachers in any district throughout the country to request needed supplies through their online catalogue. Teachers request supplies, state why they are needed and how they will be put to use and appeal to potential funders wanting to help increase educational resources to the nation s children. Once proposed, a representative from Donors Choose contacts the school district to verify and ensure everything checks out before posting the request to their platform. If a project is fully funded over a certain period of time, the supplies are then purchased and delivered to the classroom. If not, no funds are ever debited from the individual donor s account. The platform itself makes money by charging a small service fee on top of donations, and making all purchases funnel through their approved vendors.

35 25 Soon after, the emergence of Donors Choose, ArtistShare, SellABand, IndieGoGo, and Kickstarter emerged as potential funding ventures for the creative arts. The latter two have since evolved into open platforms where any creative idea can be pitched to a number of regular contributors and investors. Since the debut of ArtistShare in 2003, crowdfunding platforms have increased in funds each year (Fundable, 2014) with Kickstarter becoming the largest and most successful platform with nearly $1 billion in funds going toward full-term projects since its inception in 2009 (KickStarter, 2014). With the mainstream success of IndieGoGo and Kickstarter and the passage of the Jumpstart Our Business Startups (JOBS) Act, the support of crowdfunding platforms has received a major boost in recent years. The JOBS Act updated provisions of the nearly 80 yearold Securities Act by easing investment and general solicitation regulations related to small businesses. Under the Securities Act it was illegal to solicit and advertise for startup capital, most startup capital was acquired through traditional banks and other credit and investment firms. Furthermore the sale of securities was strictly forbidden unless previously registered with the Securities and Exchange Commission (Jensen, 2013). In an effort to stimulate economic growth, the JOBS Act rolled back these restrictions related to business investments under $1 million dollars, potentially opening the door for greater partnership exchanges and investments in addition to the traditional donation and rewards based models. In addition the JOBS Act allows entrepreneurs to legally solicit and advertise for investors (Jensen, 2013). First, by making it much easier for entrepreneurs to seek investors, it altered the existing finance structure for raising capital. Banks were no longer a necessary part of the equation, and in many cases resources are offered purely as a gift with no expectation of return or interest. Second, after the legislation and rapid growth within the industry, local

36 26 government and other civic organizations began to take note and get involved. The resulting organizational shift in these jurisdictions has led to the creation of increasingly flat, responsive, democratic organizations that are gradually more able to bridge budgetary funding gaps by appealing to their constituents through civic crowdfunding projects and platforms (Howe, 2008). Soon after the passage of the JOBs Act, a number of new niche crowdfunding platforms began to spring up. Hemer (2011) equates this growth to the increased societal acceptance of crowdfunding platforms and the view that crowdfunding can be a legitimate funding stream at best, and a complimentary one at worst for any number of projects. Much of the new growth in the United States has been in civic crowdfunding. Early examples of civic crowdfunding can be found throughout the United Kingdom and a few other countries in Europe with more relaxed funding regulations. The basic premise of civic crowdfunding is very much the same as the startup and private-sector platforms with the primary discernible difference being that these new platforms focus exclusively on community improvements. Ultimately the successful funding of any one particular project is determined by the public; a fact not lost on those advocating for crowdfunding as a more representative manner with which to allocate goods and services (Davies, 2014). For the most part, the government, or generally a representative of it, is tasked with soliciting input, formulating plans, and estimating budgets required to pitch the proposal. When a project goes live on a platform, it remains there for a set period of time during which any interested party can essentially vote with their dollars on its potential efficacy (Davies, 2014). If the requested project budget is met, the funds are then charged and distributed to the organizing agency. If a project receives partial funding, typically the local government or

37 27 organizing body will have to decide if it wants to make up the difference. If it chooses not to, funds are released back to individual investors. Table 1 - Overview of Generic and Civic Crowdfunding Generic Crowdfunding Civic Crowdfunding Overview Common Uses Scope Leverages resources of the crowd for a variety of purposes. Many, uses from business seed money to creative support and investment. Hundreds of thousands of successfully funded projects over the last few years and more than $5 billion collectively raised in Leverages resources of the crowd for community benefit. Parks, Neighborhood Cleanup, Community Investment, and Social Programming. Hard to say exactly but the best estimate is thousands of successfully funded projects. Primary Modes Online Online Popular Platforms Kickstarter, IndieGoGo, GoFundMe Citizinvestor, ioby, neighbor.ly Challenges Awareness Buy-in, awareness, legitimacy, representation, and equity. Citizinvestor and ioby are two of the more successful civic crowdfunding platforms that have cropped up over the last few years. While there is no single tried and true method, some platforms offer tangible incentives or rewards to the investor beyond mere participation, others highlight community benefit and empowerment through coalitions of stakeholders, while others still, may partner directly with governments and agencies. All are aimed at increasing civic engagement and making community s a better place to live and work. The Academic Development of Civic Crowdfunding

38 28 Much like the field itself the academic literature examining crowdfunding is still developing across both disciplines and continents. In 2014 alone, the literature on crowdfunding and particularly civic crowdfunding in America has grown substantially. Prior to this, much of the scholarly effort in the field analyzed the predominantly private-sector startup firms and civic crowdfunding examples from Europe that predated many of the American examples (Belleflamme et al., 2013; Hemer, 2011). Much of the early work examining private-sector crowdfunding has been as disparate as the platforms themselves (Schwienbacher & Larralde, 2010). Early Crowdsourcing Literature Generally, the crowdfunding literature is cited to have grown out of crowdsourcing work in the early 2000s from James Surowiecki (2005), Jeff Howe (2006; 2008), and Daren Brabham (2008a; 2013), among others (Davies, 2014; Seltzer & Mahmoudi, 2012; Stiver, et al., 2014). Surowiecki (2005) weaves together multiple fields and examples to elucidate the power of collective wisdom in everyday life, while Howe in expanding on his initial article equates crowdsourcing with the future of business in his 2008 book. Writing after both Surowiecki and Howe, Brabham (2013), who had offered a number of papers on different companies employing crowdsourcing techniques, published one of the first books by an academic explaining crowdsourcing, what it is, and what it is not. The Beginning of Private Sector Crowdfunding Research Soon after, as crowdfunding platforms IndieGoGo and Kickstarter came into existence, a number of studies began to look at crowdfunding as a subset extension of crowdsourcing (Stiver et al., 2014). Much of the early work came from Europe where Schwienbacher and Larralde (2010) took an exploratory look at moving from crowdsourcing to crowdfunding entrepreneurial

39 29 ventures. Writing that same year, Lambert and Schwienbacher (2010), based in France and Holland respectively, began to tease out factors relating to the success of crowdfunding projects. They found that most of the money coming in was in the form of donations with only some expectation of a return on investment (Lambert & Schwienbacher, 2010). While not looking exclusively at civic crowdfunding (it had yet to even be coined as such), Lambert and Schwienbacher (2010) found that projects organized and structured as non-profits were substantially more likely to succeed than others. They attribute this finding to the theory of contract failure in which consumers are unable to evaluate the quality of a good or service, potentially incenting the production of lower quality goods produced and sold at a greater profit. Non-profit organizations are generally more trusted and viewed with a greater sense of legitimacy than for profit organizations due to their perceived lack of money-making motivations which can at least partially insulate them from these concerns. Civic Crowdfunding as a Tool for Local Government Seltzer and Mahmoudi (2012) were among the first to begin to connect crowdsourcing to local government planning as a means of increased citizen participation, innovation, and a way in which to leverage the wisdom of the crowd. The primary challenge is the difficulty in designing systems with which to effectively and efficiently involve the citizenry in the business of government planning (Seltzer & Mahmoudi, 2012), as Stiver et al. (2014) note, civic crowdfunding is a way to do just that. Stiver et al. (2014) contributed to the academic research by examining civic crowdfunding as a tool for government to increase civic engagement and service delivery. They looked at four civic crowdfunding platforms, reviewing more than 120 projects and social media campaigns. What they found was civic crowdfunding has great potential for non-financial

40 30 benefits such as facilitating networking, and encouraging collaboration between citizens and government yet academic interest and theoretical development has largely lagged behind (Stiver et al., 2014, p. 2). This is at least partially attributed to the difficulty collecting data across the divergent platforms; in order to begin to address this, Stiver et al. (2014) call for future research to focus on the development of civic crowdfunding through better understanding of platform features, project effectiveness and impact, the funding community, and better synthesizing the existing research. In the most thorough examination of civic crowdfunding to date, Rodrigo Davies (2014) in his master s thesis collected data from a number of civic and generic crowdfunding platforms, ultimately accumulating a dataset of more than 1,200 successfully funded projects over a fiveyear period. Davies (2014) examined projects convened by multiple configurations of stakeholders resulting in a large number of disparate but successfully funded projects. Davies (2014) defined civic crowdfunding as projects that produce some non-rival benefits that serve either the non-excludable public or broad sections of it (p. 29). In differentiating civic crowdfunding as a sub-field of the more general and more popular generic crowdfunding, Davies (2014) examined the size and scope of civic crowdfunding as well as its characteristics and potential implications through a discussion of project demographics which was then supported by three separate case studies. Davies (2014) study asked six research questions pertaining to the size of the field, the most common projects, the geographic dispersion of projects, the dynamics of large proposals, how participants perceive their work, and how civic crowdfunding may impact traditional institutions. Davies (2014) found that while the field continues to exhibit significant growth there remain great variations in the scope and scale of projects being proposed. The majority of project proposals fall below $10,000 however there are a number of

41 31 much larger proposals that skew the data; in addition it varies greatly between the different platforms and countries analyzed (Davies, 2014). Davies examined the types of projects and the goods and services that they may produce and parsed his sample into 15 specific categories (garden/park, event, education/training, food, environment/wildlife, maintenance/renovation, public art/monuments, technology, organization, facility, streetscape, media, other, sport, and mobility). Of these he found garden/park projects to be proposed more than twice as frequently as all other projects followed by events and education/training programs (Davies, 2014). Following garden/park projects which was found to have a mean request of $14,165 the next five categories all fell below $10,000 for project requests (Davies, 2014). Regarding location, Davies (2014) found that nearly 50 percent of all proposals came from New York State; the next closest was California with less than 10 percent. Davies (2014) then offered three case studies in an effort to show specific examples of how projects may impact communities as well as local institutions. Ultimately, he concluded that while there is great promise and the field is growing rapidly there is a substantial need for additional research to more fully explore both practical and theoretical opportunities and challenges of the field before it can be utilized to its full advantage. The New Public Service The New Public Service, described by R. Denhardt and Denhardt (2000) first in an article in Public Administration Review and later in extended book form, describes a public service focused on serving rather than steering. Conceptualized as a direct contrast to the marketoriented New Public Management that had been popularized in the early 1990s with the work of Hood (1991) and Osborne and Gaebler (1992). The New Public Service departs from the

42 32 prevailing market-oriented, citizens-as-customers approach (under New Public Management) and seeks to serve and empower citizens (R. Denhardt & Denhardt, 2000, p. 549). What J. Denhardt and Denhardt (2003) describe is a rather broad reorientation of the field of public administration through the role of public servants. A reconceptualization grounded in democratic theory that takes a pragmatic, multifaceted approach in answering the challenges of governance. In describing the New Public Service, R. Denhardt and Denhardt (2000) suggest seven practical lessons for public administrators: 1) to serve, rather than steer; 2) public interest is the aim, not the by product; 3) to think strategically while acting democratically; 4) to serve citizens not customers; 5) to understand accountability is not simple; 6) to value people, not just productivity; and 7) to value citizenship and public service above entrepreneurship. Each lesson is meant to be mutually reinforcing rather than mutually exclusive and all are focused on realizing the shared values of the citizenry (R. Denhardt & Denhardt, 2000). Like the Denhardts, Perry and Buckwalter (2010) view the shifting paradigm of governance as a refounding movement; one in which old debates over public service and democratic citizenship are rehashed with the help of technological and social gains in order to further strengthen the public service of the future. Perry and Buckwalter (2010) see this paradigm shift as both a result of and reaction to political reform, as well a response to a series of influential events, from terrorist attacks, to the recession, to the election of President Obama that have only served to further engage the citizenry and cement the legitimacy of the government and public service. As government and the public service have changed, so too have the characteristics of public servants; increasingly, they show more in common with for profit, nonpublic servants than commonly thought (Park & Perry, 2013). This speaks as much to the increase in third party governance and the influx and influence of outside actors as it does

43 33 changing perceptions, values, and characteristics of the public workforce (Park & Perry, 2013). In this environment of network governance the role of the government is increasingly that of the guarantor of public values, even if they are administered by non-government actors (Bryson et al., 2014, p. 445). Thus, the foundations of the new public service and public value governance remain firmly grounded in democratic values (Bryson et al., 2014). The New Public Service and Civic Crowdfunding As the civic crowdfunding literature continues to grow, there remains a striking lack of theoretical development. By exploring the growing field of civic crowdfunding through the lens of New Public Service, it offers a connection explaining the democratic processes of the projects. This provides context and insight into areas of engagement, citizenship, and the proper role of administrators in highly networked situations much like those of civic crowdfunding. While civic crowdfunding also has the potential to explain how new models of engagement focusing on the public interest, responsiveness, and community work within the New Public Service and the greater public administration community. The recent growth of civic crowdfunding can be attributed primarily to a few factors; first, the increasing prevalence of local government not being able to provide the services that citizens have grown accustomed to in their communities. Dixon and Dogan (2002) call it governance failure when due to a lack of administrative capacity, institutional knowledge or other breakdown, government fails to provide the services citizens come to expect. This has in turn led to a hollowing of the state where the traditional roles and duties of government are increasingly filled by third party actors (Milward & Provan, 2000). The resulting transformation of governance has led to a greater emphasis and need for collaborative networks but has also created a number of boundary issues between actors (Kettl, 2002).

44 34 The entire New Public Service movement and the call for the reorientation of democratic values for a more participative, collaborative, and democratic form of local government (R. Denhardt & Denhardt, 2000) have grown out of the devolution of government and rise of network governance. Civic crowdfunding is one small example of this but also is an example that may be able to add both economic and public value for users and consumers within a community. The premise of democratic citizenship that undergirds the New Public Service is also the primary foundation of civic crowdfunding projects. These projects are designed to offer public goods and services through more inclusive processes utilizing networks of citizens and officials aimed at understanding and achieving the collective interest. When done successfully they have the ability to create public value through the articulation of the public interest within a community. By exploring the New Public Service themes of citizen engagement, democratic citizenship, and the interplay of multi-sector actors, information can be derived on how these factors work within and influence civic crowdfunding projects and community. Citizen Engagement Perhaps the most critical element of the New Public Service is responsiveness to the public interest; therefore designing and incorporating strategies to solicit this citizen input is imperative. An active engaged citizenry is viewed as more than a byproduct of engagement strategies, but also as a necessary and welcomed input into administrative processes (Stoker, 2006). Administrators need to be able to work with and alongside citizens, striving for more than just efficiency and effectiveness but also a reorientation of public sector management to create lasting public value (Boyte, 2011). Over the last two decades, technology has increasingly

45 35 become a factor in engagement strategies and significantly changed how people interact within the community and beyond, of which civic crowdfunding is a prime example. More than just a microform of civic engagement, civic crowdfunding broadly reorients engagement into a number of potential new avenues that give citizens greater voice in government (Zuckerman, 2014). Zuckerman (2014) argues that the shift to broader and particularly more digital forms of engagement is ultimately a response to a feeling of helplessness and dissatisfaction with partisan politics. These levels of engagement are more prevalent and can have greater impact at the local level than in state or federal politics. One of the primary ways in which to broadly engage citizens in New Public Service that also applies to civic crowdfunding is through the building of multifaceted coalitions in which each member brings different strengths to the group (R. Denhardt & Denhardt, 2000). The assumed motivation of stakeholders in each setting is typically public service or the desire to contribute to and make society a better place (R. Denhardt & Denhardt, 2000). Through this very participation individuals receive gratification and a sense of purpose or duty (Brabham, 2010). Most civic crowdfunding platforms simply rely on intrinsic motivators and the desire for whatever the extrinsic result of a successfully funded project may bring; however, some platforms suggest adding additional incentives which can be a unique challenge in and of itself (Brabham, 2012). Some of the more common incentives in civic-minded projects also go a long way to spur additional engagement. These typically include openings to further participate in various stages of the planning process, volunteer opportunities, and invitations to special commemorative events (Davies, 2014). An effective social media presence has become necessary to raise awareness and engage citizens (particularly younger users) who may otherwise not be cognizant of a particular ongoing

46 36 project (Gerber, Hui, & Kuo, 2012). Much like the other aspects of New Public Service, high levels of civic engagement and the resulting transparency have many positive benefits when it comes to building trust and social capital within and amongst the community and local government (Brito, 2008). This in turn makes the jobs of the administrators easier and can promote a more inclusive policy process (R. Denhardt & Denhardt, 2000), which is critical to the success of civic crowdfunding campaigns (Seltzer & Mahmoudi, 2012). Democratic Citizenship Democratic citizenship assumes a broad civic interest amongst individuals within a community over the more traditional narrow self-interests of the citizenry (J. Denhardt & Denhardt, 2003). Citizenship in this conception implies active involvement in political life ; yet this public interest is often something that administrators must promote and design structures to foster and encourage (J. Denhardt & Denhardt, 2003, p. 29). The rule of government then shifts from one in which free market capitalism dominates structure and decision making to a more collaborative, citizen-centered government in which private and self-interests are increasingly balanced or checked by greater citizen involvement in the governance process (J. Denhardt & Denhardt, 2003, p. 32). The prerequisite to democratic citizenship is a citizen-centric administration that designs, promotes, and utilizes structures and channels that foster residential satisfaction and further build citizen involvement (Grillo, Teixeira, & Wilson, 2010). Designing projects in ways that citizens can be active and engaged allows for a more inclusive process in which citizens can play a meaningful role. Civic crowdfunding in its many forms and iterations fits here as a channel through which citizens can impact and affect community. Projects vary greatly and do not always come directly from local government administration. In fact, much of the time they are

47 37 proposed by community organizations and activists. This leads to some concern over who gets to determine the collective interests (Peters & Pierre, 1998) that will be articulated through a project proposal. Like with other recent technological innovations that change the traditional roles between citizens and local government, concern over representation varies between stakeholders; despite this there is little denying the potential these platforms have to increase citizen involvement in any number of governmental functions. Meaningful citizen participation can also be selfsustaining and fostering greater education, involvement, and pride in the community of residence (J. Denhardt & Denhardt, 2003). Incorporating Multiple Actors and Sectors Although much of the work by administrators is still done within the traditional organizational hierarchy, over the last two decades, there has been an undeniable shift toward network governance or the incorporation of multiple sectors and actors (Agranoff, 2006). This devolution (Kettl, 2002) or hollowing out (Milward & Provan, 2000) of the state has led to an increase in collaborative networks and third party actor service provision. While this creates a number of organizational and potential accountability concerns, it also has one huge benefit: the potential to increasingly address resource shortages through a number of new channels (Agranoff, 2006). Traditional methods of local government problem solving and service delivery are increasingly evolving with new technology and the incorporation of more actors into the governing process. Traditionally and predominantly much of the revenue of local government comes from regressive taxes such as property and sales tax (Warner, 2010). People increasingly want more services but want to pay fewer taxes. Technology and economic restructuring have

48 38 dated existing models of taxation (Warner, 2010). Furthermore the needs of a given district can vary greatly across and even within metropolitan areas and can be significantly impacted by size and structure of each municipal government, which in turn can have numerous potentially adverse impacts on the quality of life of the citizenry (Gyourko & Tracy, 1991; Hochman, Pines, & Thisse, 1995). Coupled with fewer available federal funds and a number of costly maintenance and infrastructure renovation projects that are plaguing much of the country, local governments are left with what Martin et al. (2012) describe as the new normal, an exceedingly resourceconstrained environment. One way in which to address this growing issue is to begin to rethink local government revenue sources (Warner, 2010). The growth of technology as well as other factors has led to a need to rebuild government capacity by taking a more open and progressive attitude toward potential resource and revenue streams (Warner, 2010). Community engagement is one way in which government and market shortfalls can be addressed (Demediuk et al., 2012). There are a number of mechanisms, such as the coproduction of goods and services that along with crowdfunding begin to fill the engagement gap. In this scenario crowdfunding connects participants with administrators in a way that boosts local engagement and can have a number of additional positive impacts within the community (Demediuk et al., 2012). Initially civic crowdfunding projects started as a way for enterprising citizens or organizations to pool resources for community improvement. More recently, larger organizations and many local governments have begun turning to crowdfunding as a way to address revenue and funding issues (Davies, 2014). Hawaii has recently taken this a step further by formally introducing state-wide civic crowdfunding legislation, which would be the first of its kind in the United States. The proposal

49 39 points out that crowdfunding would not be an exclusive funding mechanism for local government, but would serve to complement other more traditional funding streams (Public School; Repair and Maintenance; Hawaii 3R's; Crowdfunding; Pilot Program; Appropriation HI BB2631, 2014). By formalizing civic crowdfunding as a funding tool for state and local government, Hawaii would have been better equipped to control the process and ensure representation through new and existing structures. The legislation, however, never made it beyond introduction to the House floor. While crowdfunding holds potential as a means to supplement revenue streams it also has the potential to shift local government to an increasingly democratic model. In doing so, administrators still retain final authorization and decision making power but citizens may have substantially greater input throughout the process (Cabannes, 2004). By engaging citizens in such a manner, there will be greater potential for discourse between administrators and citizens to stress the need for a more appropriate balance between revenue generation and public service demands (Warner, 2010). Greater engagement also means greater protections against concerns of fraud and manipulation. Furthermore, the more inclusive the process and the more funding sources identified beyond the traditional tax and spend model, then the greater potential quality of life for the citizenry (Warner, 2010; Wright, 2012). Contemporary Challenges for Local Government At last count there were nearly 90,000 independent local government institutions consisting of counties, municipalities, townships, special districts, and independent school districts across the United States (Barnett, Sheckells, Peterson, & Tydings, 2014). Collectively they carry a debt load of nearly 2 trillion dollars, and with few means to raise revenue outside of taxes, grants, and relying on the state and federal governments, citizens often feel the results of

50 40 the shortfall, whether through service cutbacks or other related cost-saving measures (Barnett et al., 2014). Cut backs typically start with services like neighborhood improvements, community upkeep, parks, and other sources of neighborhood pride are the first to go unfunded when the independent local government institutions face financial challenges. It is not just financial challenges facing local government, but structural challenges as well. The continued shift toward governance and the difficulties in reconciling the management and accountability challenges of these networks with the bedrock ideas that hierarchical authority has long provided make for the most difficult challenge facing local government today (Kettl, 2002, p. 129). The combination of these fiscal and structural challenges creates a number of concerns and opportunities for leadership (Agranoff, 2013). To best address such concerns, a number of steps must be taken, including modernizing administration, working to further engage the citizenry in the business of government, and promoting collaborative partnerships (Nalbandian, O'Neill, Michael Wilkes, & Kaufman, 2013). Modernizing administration in the name of efficiency and effectiveness and still maintaining and promoting democratic processes remains a primary challenge for leadership (Nalbandian et al., 2013). By standardizing and streamlining government structures and services, the goal is to promote efficient resource utilization and more effective and innovative policy support in the search for credibility, accountability, and improved trust in governing institutions (Nalbandian, 2005, p. 312). In order to increase administrative capacity, it is imperative that the proper balance is struck between these concerns of accountability, equity, and efficiency (Warner, 2010). In doing so, local governments incorporate and maintain the adaptive tools necessary to successfully operate both inside and outside of government (Agranoff, 2013). Successful local government administrators must be skilled bridge builders having the ability to

51 41 connect conflicting techniques by bridging the gap between political acceptability and administrative sustainability in local communities (Nalbandian et al., 2013, p. 568). A prime example is the balance needed to both modernize administrative procedures while at the same time promoting and incorporating civic engagement in government. As Nalbandian (2005) points out, modernizing administration by promoting structures based on efficiency and technology is often in direct conflict with promoting citizen engagement and participation; striking this balance and appealing to proponents on each side can be exceedingly difficult. The challenge of civic engagement is often a double edged sword for administrators; first how to engage and encourage citizen participation can be a challenge unto itself, and also then maintaining an effective balance between administrative modernization and the politics of identity in a way that promotes administrative sustainability and political acceptance (Nalbandian et al., 2013). Overcoming the general disconnect that often exists between local government and the citizenry is yet another challenge that must be addressed by local governments to strengthen understanding, civic engagement, and performance of government (Barnes, 2010). Nalbandian et al. (2013) argue that citizen engagement is no longer optional it is imperative and that connecting engagement initiatives to traditional political values and governing processes is an important mark of successful community building (p. 567). Grillo, Teixeira, and Wilson (2010) equate residential satisfaction with civic engagement, which itself is a manifestation of social capital. By designing institutions and social processes in which citizens can actively participate, local government can also promote more sustainable communities focused on a wide range of social issues that go beyond environmental sustainability (Portney, 2005).

52 42 Civic crowdfunding projects offer a way to connect citizens to government through project articulation and development, particularly by highlighting project need and including citizens in the planning process prior to the funding period (Lindsay, 2015; Seltzer & Mahmoudi, 2012). The resulting co-produced services can result in more, higher quality and lower cost services throughout the community (Bovaird, 2007). By properly incenting participation, public awareness can be increased in a manner that promotes transparency, collaboration, and civic engagement (Mergel, 2015b). By collectively identifying problems and developing and articulating project needs within the community, civic crowdfunding can be utilized as a problem-solving mechanism with the ability to supplement the budget while increasing civic engagement (Chieppo, 2012; Seltzer & Mahmoudi, 2012). In this sense, civic crowdfunding can be utilized as a tool to both modernize administration through technological processes and also as a method within which to supplement the budget all the while increasing citizen involvement in the planning process. By encouraging open innovation outside of traditional organizational boundaries, government may be able to leverage the collective intelligence of the crowd to increase capacity in ways otherwise not possible (Mergel & Desouza, 2013). Another challenge for local government is moving beyond cooperative partnerships to collaborative working arrangements in which partners work on equal footing to achieve common goals (Agranoff & McGuire, 2003). As public organizations become increasingly flat and traditional top down hierarchical command and control is often augmented and even replaced in some instances by network governance, administrators must work to build social capital and foster collaborative working arrangements in an effort to create and maintain public value (Morse, 2010). Ensuring participants are equal ground can be a primary challenge for collaboration conveners (Mayer & Kenter, 2016). The increasing shift toward multi-actor

53 43 governance and the continued devolution of public-sector service delivery requires local government professionals to be both willing and skilled in multi-sector partnerships. The unique value of local government professionals in these multi-sector partnerships centers on recognizing that the strongest bridges are built on solid foundations of public values, values that local government professionals have embraced and should not shy away from advocating (Nalbandian, 2005, p. 311). Civic Crowdfunding, Local Government, and the Community Strengths By incorporating civic crowdfunding into local government service delivery and planning, administrators have the potential to expand the traditional role of government, promoting an inclusive process of mutual dialogue and decision making. With civic crowdfunding, government actors have the ability to not only fund more projects on their budgets, but to do so without raising taxes while at the same time increasing civic engagement and goodwill (Bryson et al., 2014; R. Denhardt & Denhardt, 2000). Taking advantage of these co-produced services can have many positive implications for administrators, users, and the community as a whole (Bovaird & Loeffler, 2013) by promoting a more transparent and inclusive government that has the potential to bring a number of individuals directly into the policy process and also addresses a number of contemporary challenges for local government (Stiver et al., 2014; Zuckerman, 2014). There are several strengths associated with civic crowdfunding. The first is that it promotes democratic citizenship and encourages individuals to take a more active role in their government. This in turn leads to more representation, greater transparency, and decreased chances for fraud or other illicit activities (Miglietta, Parisi, Pessione, & Servato, 2014). The

54 44 second major strength is the amount of resources that it can bring into an area of great need (Davies, 2014). While project success may be impacted by the general wealth of the funding community, this is not always the case, as awareness can also play a major role in moving the campaign beyond a geographic boundary (Davies, 2014). Another strength of civic crowdfunding is that it is a relatively low impact and low harm strategy. If a project gets funded it moves forward; however, if it does not, administrators are typically only out the fees and time that went into planning, which in some cases may be substantially greater than others. In many civic crowdfunding proposals however, very few resources are wasted because projects are typically relatively simple undertakings that have yet to find their way to the budget, or projects in which much of the upfront developmental and planning costs have already been contributed by various groups and civic organizations (Davies, 2014). In this conception it is important to visualize civic crowdfunding as a complementary tool of local government that administrators and citizens develop together for community improvement. Civic crowdfunding is not a replacement for traditional budgeting and project development structures. As a complementary tool, civic crowdfunding has the potential to finance often difficult to fund pilot programs as well as attract matching federal and private grant money to further address big-picture issues (Lindsay, 2015). Successfully funded projects have the ability to benefit local government as well as the citizens and community. Many of these projects have no limit on their scope, addressing anything from neighborhood cleanups to the community infrastructure. Furthermore, they often allow citizens to be as involved as they want to be in each project (Miglietta et al., 2014). Civic crowdfunding has the potential to create these

55 45 unique relationships between citizens and government, providing access and resources to each party for the benefit of the community (De Buysere, Gajda, Kleverlaan, Marom, & Klaes, 2012). Concerns In addition to the obvious and inherent strengths that civic crowdfunding has, there are a number of concerns that must be at least considered, if not addressed, before crowdfunding can be used by government entities regularly. As is the case in any instance where third-party actors take over some aspect of public service provision, there are a number of questions over the appropriate role of boundaries. Fuzzy boundaries impact government s role, accountability, and decision making; often leading to uncertainty and confusion over the role and responsibility of involved actors (Davies, 2015). As much of civic crowdfunding is done through online networks that must be integrated into traditional systems, service delivery can be greatly impacted. Furthermore, crowdfunding is such a recent innovation and tool for government that to date there just is not much of an example or precedent to follow in designing and integrating crowdfunding into local government on a consistent basis (Miglietta et al., 2014). One of the primary criticisms of civic crowdfunding as a potential alternative funding mechanism is that the process has the potential to be co-opted by elites (Seltzer & Mahmoudi, 2012). Within this scenario, representation is little more than an illusion because elites leverage their contacts and interests to control the crowdfunding project agenda (Davies, 2014). On one hand the case can be made that any community improvement is better than none; however, it does raise issues of equity that must be considered and accounted for by administrators to ensure that projects that reach the crowdfunding agenda are more than just the pet projects of a select few (Seltzer & Mahmoudi, 2012). This concern is especially true in the local government setting. During the traditional local government budgeting and resource allocation process, elites can

56 46 exhibit substantial influence; however they are still constrained by a number of legal checks and balances. As a relatively new innovation and one in which local governments are still trying to figure out how to best incorporate, civic crowdfunding projects may lack the safeguards that more traditional service funding and delivery methods employ to prevent manipulation or cooptation. Even when representation is assured, not everyone is so eager to extoll the virtues of increased civic engagement. Dissidents argue that civic engagement is too bland and too much of it may be more of a hindrance than a help, essentially grinding the already slow moving gears of government to a halt (Berger, 2011). Furthermore, for as much as crowdfunding proponents have advocated for diversity and representativeness, studies have shown that achieving diversity in public organizations remains a work in progress (Broadnax, 2010; Choi, 2009). Often there is a fine line between diversity, representation, and discrimination, as a recent Supreme Court case illustrates. The case originated in Texas over the statutory power of the 1968 Fair Housing Act and whether the act prevents more than simply overt housing discrimination policies and practices (Texas Department of Housing and Community Affairs et al. v. Inclusive Communities Project, Inc., et al , 2015). In a 5-to-4 decision, the Court ruled that the Fair Housing Act not only prevented overt discriminatory practices, but also less obtrusive measures; this essentially includes those identified through data analysis that whether intentional or not, resulted in discriminatory bias (Texas Department of Housing and Community Affairs et al. v. Inclusive Communities Project, Inc., et al , 2015). Creating systems that are palatable to all and promoting diversity while mitigating discrimination is an ongoing challenge; particularly as we continue to grow and evolve as a culture and society (Broadnax, 2010, S178).

57 47 In addition to the concerns over diversity, the increase in it has not necessarily translated into greater executive representation (Mor Barak, 1999). Similar negative impacts have been found when examining ethnic community diversity, which Putnam (2007) has found to have significant negative impacts on levels of civic engagement. This could potentially mean that civic crowdfunding does not work quite as well as proponents would lead others to believe and also that what works in one region or city may be entirely different from what works in another based on regional context and social capital. Accountability is another potential major issue. As service provision and delivery are further devolved amongst a number of third-party actors and stakeholders the scope and complexity of accountability is increasingly stretched (Mulgan, 2000). Having the proper institutional arrangements in place becomes tantamount to ensuring service and accountability to constituents (Wagner, 2012). This increasing shift toward governance and greater reliance on third-party actors has led to a change in the conceptualization of what accountability truly means (Erkkilä, 2007). Accountability has traditionally been seen as a sense of control or of answerability. However, due to changes in government and structure, increasingly new alternatives are being sought out in lieu of (Erkkilä, 2007) the more traditionally accepted legal, political, bureaucratic, and professional types of accountability (Romzek & Dubnick, 1987). Network dynamics and the resulting complexity make it difficult to evaluate and incorporate traditional types of accountability into devolved governance structures (Koliba, Zia, & Mills, 2011). Increasingly, performance accountability focused on outcomes, and deliberative accountability concerned with public discourse, have become prevalent in the accountability literature as third-party governance has continued to grow (Erkkilä, 2007).

58 48 Civic crowdfunding is more concerned with deliberative accountability, particularly as it relates to transparency and trust, both of which have been found to be positively related to citizen satisfaction (Kim & Lee, 2012). A prime example of this in civic crowdfunding is the accountability concerns that stem from communication issues and how communication should be carried out post investment, which can be a major challenge for management (De Buysere et al., 2012). Related, and perhaps an even larger concern, is how to address and differentiate between those who invested in what is or will become a public good and those who did not. This is a particular issue because donor information in most cases is withheld or anonymous. Because every individual citizen in the jurisdiction is a stakeholder, but only small percentages of that faction are actual investors, balancing the concerns of both can become a major challenge that can call into question the legitimacy of governing institutions (Nalbandian et al., 2013). Ultimately, not everyone is quick to buy-in when it comes to crowdfunding as a potential resource generator for local government. Efforts have to be taken by administrators to safeguard against some of the potential concerns discussed above by continually designing, implementing, and reevaluating attempts geared toward increasing representation, equity, and participation (Davies, 2015). In the end, designing the necessary systems and structures to accentuate the strengths (funding community needs that may otherwise go unfunded and providing otherwise scarce resources) while guarding against the weaknesses (primarily challenges to traditional governance structures) of civic crowdfunding remains one the biggest challenges facing administrators both now and in the future. This is an issue that must be addressed in order for the strengths of civic crowdfunding to overcome its difficulties and become a viable supplemental alternative to traditional-funding mechanisms for local government.

59 49 Implications For Local Government Civic crowdfunding has the potential to be a disruptive positive force due to its success as a non-traditional funding mechanism for local government (Mollick, 2014). This early success and continued growth of projects around the country coupled with eased federal regulations have led to an increasing number of local governments turning to crowdfunding to solve local dilemmas. As civic crowdfunding projects become more prevalent and are employed on a widerscale, such projects have the potential to shake-up local government by altering and impacting the traditional roles and boundaries between citizens and administrators (Nath, 2011). Designing meaningful public participation processes has long been a challenge for local government administrators (Bryson, Quick, Slotterback, & Crosby, 2013). Organizations have to find appropriate relationships between the entrepreneurial problem (which strategy to adopt), the engineering problem (which technologies to use), and the administrative problem (which processes and structures to select) (Boyne & Walker, 2010, p. 188). Designing structures that properly balance out these challenges through processes that operationalize and facilitate engagement can be critical to organizational success (Demediuk, Solli, & Adolfsson, 2012). One of the primary challenges for administrators in civic crowdfunding projects is figuring out the proper role of citizens in the process (De Buysere et al., 2012), and defining it in a way that maintains the integrity of the process (Mayer, 2016). This is further compounded as support and involvement are likely to vary greatly amongst stakeholders (Miglietta et al., 2014). Designing structures that promote accountability, while minimizing concerns of equity and representation are necessary challenges that administrators must deal with before civic crowdfunding can be used successfully (Parr, 2014; Seltzer & Mahmoudi, 2012). The incorporation of multiple approaches and network actors is often critical, especially early on in

60 50 civic crowdfunding projects (Lambert & Schwienbacher, 2010). A multifaceted approach may have the potential to protect against potentially fraudulent (Mollick, 2014) and subversive behavior (Seltzer & Mahmoudi, 2012) by a few rogue actors that may have ulterior motives. By designing a series of small decision making hubs on any number of issues it would not only promote more active participation but also mitigate against capture and corruption from more influential actors (Noveck, 2009). Ensuring open lines of communication and promoting frequent dialogue between administration and stakeholders can go a long way in mitigating potential concerns and also building and maintaining social capital (Frey, Lohmeier, Lee, & Tollefson, 2006). In addition to structural concerns, the use of civic crowdfunding raises a number of decision making implications that local government administrators must weigh and balance before deciding whether to utilize civic crowdfunding in their localities. Primarily they must determine whether civic crowdfunding is an opportunity that can positively impact their communities or whether it is a threat to their view of government, or perhaps an unnecessary headache not worth the time and effort (Davies, 2015). Community participation in government is almost universally praised as a more democratic and effective policy making tool, yet incorporating citizen input into agency decision making is not a costless process (Irvin & Stansbury, 2004, pp ). Decision making is critical at this juncture; government administrators must carefully approach the decision to move forward with civic crowdfunding projects and must consider the potential benefits and risks to their individual communities and goals before moving forward (Davies, 2015). It becomes less about the benefits or drawbacks of community participation (civic crowdfunding is by definition a participative community process)

61 51 than it is a decision for administrators as to what degree to value and incorporate citizen participation into the project planning process. Decision making is highly contextual, different problems require different solutions and understanding and articulating the problem in a way that it can be addressed can often be a particular challenge (Bryson et al., 2013). Bringing in content experts and building multifaceted coalitions can help leadership to address this by properly scaling decisions to problems (Bryson et al., 2013). Decision making often involves a critical balance in local government policymaking between elected officials (often part-time politicians) and administrative experts (highly knowledgeable, but typically lacking policymaking authority) who collectively combine the knowledge and skills necessary for policymaking (Zhang, Zhang, Lee, & Yang, 2012). Bovaird (2007) among others argue that this process is outdated and that the co-production of services, in which citizens play an increasing role in service production, provides for a more representative and efficient model of production and delivery. Over the past decade in an increasingly resource constrained environment, the call for co-produced services and to further include citizens and also stakeholders, both public and private, into the policymaking process has grown (Ansell & Gash, 2007). This form of collaborative governance utilizes collective wisdom and dialogue between stakeholders in an effort to make policymaking and governance more representative of the public will (Ansell & Gash, 2007). In doing so, systems must be designed and properly planned to integrate the public and crowdsourced data in order to best take advantage of it (Clark, Zingale, Logan, & Brudney, 2016). One of the primary drivers of this shift in governing has been substantial increases in technology made over the last decade particularly with regard to social media and other new

62 52 media platforms that both connect and engage citizens and have the potential to greatly impact the policy-making process; civic crowdfunding as a supplemental tool, has the potential to do just that (Nath, 2011; Zuckerman, 2014). The success of civic crowdfunding has the potential to change the decision making process by bypassing the traditional mechanisms of project development. Due to the broad inclusive nature of civic crowdfunding it has the potential to greatly expand the policy-making process to a number of interested actors, promoting both transparency and representation, and effectively allowing citizens to vote on projects with their resources as they see fit (Seltzer & Mahmoudi, 2012). Civic crowdfunding has the potential to influence the planning and budgeting arms of the policy process for projects both on the crowdfunding agenda and those that are not by bringing new revenue streams into the community (Lindsay, 2015), Civic crowdfunding can also provide insight to citizen preferences. Citizen participation does have the ability to reveal citizen preferences and in turn positively impact public good provision (Robbins & Simonsen, 2002). The idea of preference revelation dates back at least to the work of Tiebout (1956) more than a half century ago. Tiebout (1956) suggested that in general local governments are inefficient and have little incentive to offer particular services to citizens. The solution to increasing efficiency is public choice. Assuming citizens have both perfect mobility and perfect information, as well as behave in a rational, self-interested manner, they should in theory be able to move to jurisdictions that offer more of the services they seek, thereby revealing their preferences (Ostrom, Tiebout, & Warren, 1961; Tiebout, 1956). Much of the study of preference revelation and the role of citizens in resource allocation has been limited primarily to the examination of voting behavior, a crude and simplistic practice (Robbins & Simonsen, 2002), and citizen satisfaction surveys (Wilson, 1983). Recent

63 53 technological advances and the increasing incorporation of them into government have begun to allow for more dynamic understandings and evaluations of citizen preference revelation (Aron, Sundararajan, & Viswanathan, 2006). Literature from another form of preference revelation that increases participation and community development, participatory budgeting, indicates that local government officials will the need to determine the pros and cons and level of institutionalism. In other words, they need to determine how formal should the ties be to government and how much reponsibility should citizens have (Cabannes, 2004). Preference, when articulated by enough people often leads to service delivery, something that has changed of late due to the Great Recession of Spurred by the housing bubble burst and a national bank crisis; local government has been experiencing and adjusting to a new normal, one in which finances, employment, and services are more constrained than at any other time in recent American history (Martin et al., 2012). In an environment that was already being impacted by local government decentralization, local government capacity for dealing effectively with policy issues, particularly when competing with business enterprises, has resulted in a conflicting system of service provision and delivery (Wagner, 2011). One of the main reasons for the breakdown is the different values between sectors and the continual evolution of public service values; the private sector values efficiency, while the public sector is predicated on service and the public interest (Van Wart, 1998). As a response to the recent new normal brought on by the Great Recession, as well as citizens increasing demands for transparency and sustainability, civic crowdfunding has increasingly been turned to as a means with which to make decisions of public expenditures (Miglietta et al., 2014). In addition to better incorporating the public into governmental decision

64 54 making, crowdfunding can potentially be a tool that local government can utilize to augment traditional tax and spend service delivery mechanisms (Seltzer & Mahmoudi, 2012). By increasing responsiveness and giving citizens a more active role and louder voice in public service delivery, crowdfunding produces a number of beneficial results for the public sphere and local government administration (Davies, 2015). For Citizens As discussed earlier, civic crowdfunding has the potential to give citizens greater voice than they are accustomed to through the traditional channels of government (Chieppo, 2012). As citizens are the primary target for resource generation in civic crowdfunding they maintain a unique relationship collaborating with planners and decision makers to influence and direct policy (Seltzer & Mahmoudi, 2012). In turn, this promotes a more open, transparent, and democratic government that has the potential to solve the resource issues of government, meet the demands and expectations of citizens, and increase social capital (Miglietta et al., 2014). A potential issue with these new structures and relationships created by civic crowdfunding platforms is that of accountability. The primary challenge is how to deal with the changing nature of accountability associated with crowdfunding, as roles and boundaries begin to change and blur. Representation and access may present another dilemma for administration as local government should ensure representation but access may be affected by technological savvy, financial resources, and other factors. Further understanding these roles and expectations, especially as they relate to the citizens, is critical to the development of the field and the acceptance of civic crowdfunding as a potential alternative funding mechanism for local government.

65 55 The Characteristics of a Successful Civic Crowdfunding Campaign Wide Spread Project Appeal Proposing projects that are non-controversial and offer widespread appeal can be critical to garnering the support necessary within a community to successfully fund proposals. Wide spread project appeal can increase participation provided there is a proper balance of incentive and public interest (Gajda & Koliba, 2007; Imperial, 2005). This often starts with political leadership articulating, encouraging, and empowering citizens to play a role in local government (R. Denhardt & Denhardt, 2000). Strategic planning and the leveraging of information technologies can be a particularly effective way in which to increase participation among potential stakeholders (Ketokivi & Castañer, 2004; Yang & Melitski, 2007). Emerging social media is another opportunity that offers promise for administrators to increase participation by making information dissemination easier and more convenient for citizens (Bryson et al., 2013). There is no particular set number of engaged individuals required for a successfully funded venture but for large-scale crowdfunded initiatives it is generally accepted that hundreds or even thousands of participants are required to ensure a true representative of the population (Davies, 2014). Funded projects with relatively small donor bases run the risk of being accused of using the term crowdfunding as a gimmick, rather than an indication of broad-based participation (Davies, 2014, p. 30); yet many of the proposed projects are smaller in scale. By building in multiple mechanisms that promote crowdfunding initiatives, project conveners are more likely to increase participation and realize funding goals while mitigating other concerns. These levels of wide spread project appeal are often seen in the number of involved stakeholders in the projects convening. By articulating demand and exhibiting how the initiative fills a resource need, projects are more likely to reach a large audience and

66 56 consequentially increase project knowledge and success while mitigating concerns of fraud and abuse (Davies, 2014; Mollick, 2014). Multifaceted Marketing Approach The need to get the word out, promote, and hype a campaign cannot be overstated, and aggressive marketing and public relations plans are particularly critical in the early stages of crowdfunding projects (Brabham, 2009, p. 256; Lambert and Schwienbacher, 2010). The key is not simply to raise money, but also to raise awareness (Mariotti, 2014). As Brabham (2009) states these tactics should include both mainstream marketing and public relations campaigns (e.g. press releases, paid advertising, public service announcements), as well as alternative strategies (e.g. viral marketing through social networking sites, guerilla marketing, image events) (Brabham, 2009, p. 256). By promoting the campaign through multiple media platforms, the goal is to create excitement for the project and to create a vibrant and active crowdfunding community as rapidly as possible (Brabham, 2009; Hemer, 2011). This can create a particular challenge for local government, often already operating in a constrained environment when compared to the private sector. Yet increasingly a growing number of resources are being allocated to digital and social media presence within the public sector, whether through in-house application or other innovative and collaborative relationships with external stakeholders (Mergel, 2015a). When done well, crowdfunding platforms allow people to overcome offline barriers to market transactions [and] reduce market frictions associated with geographic distance (Agrawal, Catalini, & Goldfarb, 2013, p. 3). Crowdfunding problems and proposals are usually contained within a local jurisdiction. However, it is possible to expand the footprint of the initiative by engaging individuals who live outside of the area (such as former residents,

67 57 philanthropic minded people, etc.) by executing a broad approach to the campaign and problem description (Baeck & Collins, 2013). This can typically be done by running social media campaigns in conjunction with the crowdfunding platform and in turn linking and advertising each network together (Best, Neiss, & Jones, 2012). This broad based marketing strategy, incorporating multiple networks and modalities also promotes transparency and in turn reduces the likelihood of fraud (Best et al., 2012). Mutual Awareness Perhaps the largest observable distinction between new online crowdfunding ventures and traditional donation-based giving is mutual awareness of donors (Davies, 2014). What this refers to differs significantly from traditional donation-based philanthropy, where the donor has little say in how the funds are allocated or even awareness to what the funds are used for. Mutual awareness relating to crowdfunding highlights the inclusiveness of the process. At any point in time potential investors can review the project scope and goals to determine if it is something they want to support as well as track the progress of the funding effort and see exactly how their donation has impacted the campaign. In online crowdfunding projects, all donations are public which helps to increase transparency and responsiveness and at the same time mitigate potential for misuse of funds to an extent (Brito, 2008; Mollick, 2014). Donors can choose to remain anonymous or can attach their name to the amount given for all to see. In either case, this strategy helps to increase awareness in addition to building a sense of community that unites all donors (Davies, 2014). More often however, donors fail to self-identify and the platforms do not release this information. This typically results in a project proposal that lists the donation amounts and individual names as reported, allowing for the computation of mean donations and

68 58 number of donors, yet providing little concrete information about where the funding is actually coming from. Mutual Benefit Mutual benefit strikes at individual motivation and the necessary incentive structures that must be in place for organizations to reach their desired ends; without mutual benefits, information will not lead to collaboration (Thomson & Perry, 2006, p. 27). For citizens these motivations are non-economic, and for organizations involved in crowdfunding ventures, motivations are almost solely based on raising capital for project development. In the majority of crowdfunding scenarios monies are raised through a donation or patronage model in which funds are pledged in a philanthropic manner to support a community goal or benefit (Belleflamme, Lambert, & Schwienbacher, 2013; Massolution, 2012; Mollick, 2013). These models allow for mutual benefit and crowdfunding initiatives of variable complexity and modularity always entails mutual benefit (Estelles-Arolas & Gonzalez- Ladron-de-Guevara, 2012, p. 195). By making participation worthwhile for citizens, municipalities are able to provide a form of benefit for constituents, all the while utilizing the citizens resources to accomplish the goals of the local government (Imbroscio, 2013; Seltzer & Mahmoudi, 2013). This unique access situation for citizens and the minimal cost fundraising for municipalities provides an unparalleled source of capital and a real opportunity to apply leverage where all other formal financial services fail (De Buysere et al., 2012, p. 19). Participation Participation is one of the primary conditions of a successful crowdfunding campaign, the more people who participate the more successful the proposal (Davies, 2014). Proposing the right projects, projects that appeal to the broadest segments of the local population can be

69 59 imperative to bringing in the most possible donors. Research has found that gratification often comes from participation (Brabham, 2010). Many of the larger and more popular platforms do very little to encourage community (targeted contributors) engagement, but most of the smaller civically orientated platforms take advantage of it (Davies, 2014). Community engagement and community engagement processes also have the ability to increase project transparency and build trust and social capital between individual funders and the organizing body (Brito, 2008). In situations characterized by high levels of social capital and trust, administrators are increasingly able to address public interest while working toward addressing the shared goals of the community (R. Denhardt & Denhardt, 2000). In civic crowdfunding projects, participants often are viewed as members rather than stakeholders (as the whole of the community is a stakeholder) (Schwienbacher & Larralde, 2010). When done effectively, participation and community engagement can be a useful technique for planners to promote a more inclusive planning and policy-making process that is both representative and equitable (Ansell & Gash, 2007; Seltzer & Mahmoudi, 2012). Real Time Updates The prevalence of social media and the connectivity of crowdfunding platforms make the ability to tell a story in real time an important part of the process. Research has shown that frequent updates and real time storytelling have been linked to successfully funded campaigns (Davies, 2014); yet some projects still offer little in the way of progress reports and status updates. Frequent updates can serve to increase and promote open lines of communication and in turn help to further build social capital (Frey et al., 2006; Noonan, McCall, Zheng, & Erickson, 2012; Thomson & Perry, 2006; Thomson et al., 2009). Promoting a broad vision that can be

70 60 reinforced and updated through frequent communication also allows for greater boundary spanning amongst stakeholders and more trust in the process (Ferreyra & Beard, 2007). Frequent updates and semi-open lines of communication are an often overlooked in today s world of almost constant connection with technology but remain a vitally important component of successful crowdfunding initiatives (Davies, 2014). Rewards Reward-based crowdfunding, one of the four commonly accepted types of crowdfunding projects, highlights consumer motivation (Esposti, 2012; Mollick, 2014). These motivations are either extrinsic, where a consumer is actively seeking a tangible benefit, or intrinsic when the activity itself is self-fulfilling (Kleemann et al., 2008). Many of the larger crowdfunding platforms, i.e. Kickstarter and IndieGoGo follow an extrinsic rewards based model in which there is generally some sort of exchange between crowdfunder and crowdfundee. Most civic crowdfunding sites such as Citizinvestor and ioby focus on the donation or patronage model of crowdfunding. Under this model consumers donate time, money or other resources with little to no expectation of tangible return (Belleflamme et al., 2013; Esposti, 2012; Mollick, 2014). Donation giving can be done for a number of reasons; studies have found donation-based support to be fun and rewarding to intrinsically motivated people (Brabham, 2008b; Kleemann et al., 2008). Some individuals feel it is their civic duty, some want to support particular community projects (Baeck & Collins, 2013), while others participate for entirely selfish reasons as a way to directly impact the future of their community in any manner they see fit (Bovaird & Loeffler, 2012; Kleemann et al., 2008). Whatever the motivation, it generally falls into one of five dimensions of public value: user, community, environmental, social, or political value that spurs individual participation in the coproduction of services (Bovaird & Loeffler,

71 ). In any case, the coproduction of services is a dynamic process in which citizens transform the service, and in turn, they are themselves transformed by the service (Brandsen & Pestoff, 2006, p. 496). These relationships have the potential to increase trust in government and promote greater levels of engagement through the use of technological innovation (Clark, Brudney, & Jang, 2013). Visible Problems Visible problems involve identifying a need that the community can support; they are often rooted at the grassroots level and flow upward to local government administration to which crowdfunding is conceptualized as a problem-solving mechanism for administrators (Brabham, 2008; Estelles-Arolas & Gonzalez-Ladron-de-Guevara, 2012). Brabham (2008) calls it an emerging, successful, alternative business model [that] is a legitimate, complex, problemsolving model (p. 76). One of the most important aspects of addressing visible problems in community-wide issues is the matter of presentation, both how the issue is defined, as well as how it is presented on the crowdfunding platform (Seltzer & Mahmoudi, 2013). If a project is overly complex or presented in a manner where it is difficult for potential funders to see a direct benefit, the odds of funding become that much more difficult. Generally the more technical expertise required within a project, the more challenging it may be to garner public support (Seltzer & Mahmoudi, 2013). Because many crowdfunding platforms are of the all-or-nothing variety it is highly critical that municipalities take care to focus on issue definition and properly align the problem with an appropriate response.

72 62 CHAPTER THREE METHODOLOGY Research Methodology The purpose of this study is to examine the role of civic crowdfunding in public administration and local government in an attempt to better understand the types of projects that ultimately get funded, where the money comes from, and what makes some projects successful while others fail. Because there are no known or accessible databases indexing the information required to address the research questions, all data are collected directly from the original source platforms. The unit of analysis in each research question is the individual, unique crowdfunding project proposal. To best address the above issues, this research utilizes both qualitative and quantitative methodologies. The qualitative analysis provides insight on project type and proposal characteristics. The quantitative analysis focuses on project success through the analysis of multiple regression models. The remainder of this chapter discusses the methodology used in the analysis; first outlining the qualitative methodology section including the purpose, research question and hypotheses, data collection, and overview of the analysis. The following section addresses the quantitative methodology section, beginning with the purpose of the research, research question and hypotheses, data collection, and overview of the analysis. Finally, study limitations and delimitations are discussed. Qualitative Analysis Methodology The qualitative analysis methodology utilizes a directed document content analysis (Hsieh & Shannon, 2005) to address the first research question and related hypotheses. A directed approach begins with a relevant theory or research findings for initial coding (Hsieh &

73 63 Shannon, 2005). This approach utilizes the New Public Service and emerging crowdfunding literature as a guideline for initial coding. The incorporation of this literature informs the study and allows the researcher to better identify meanings and summarize patterns from the collected textural data. This is particularly useful in identifying and addressing both the types of projects that are proposed and the characteristics of those projects as well as how they fit within the concepts of the New Public Service. Research Question and Hypotheses Project Type: What projects do conveners attempt to fund through civic crowdfunding platforms? What projects actually get funded? Davies (2014), in the most comprehensive analysis of civic crowdfunding to date reviewed seven platforms including generic and civic as well as American and international platforms. In his analysis, Davies (2014) utilized a fifteen category typology of project classification; this included: garden/park, event, education/training, food, environment/wildlife, maintenance/renovation, public art/monuments, technology, organization, facility, streetscape, media, other, sport, and mobility project proposals. When examining the category of projects most frequently proposed across the seven disparate platforms, garden and park projects were found to have been proposed much more frequently than all other categories. This hypothesis tests Davies (2014) findings and highlights the most frequently proposed categories across the reviewed platforms. This study measured this hypothesis by tallying the accumulated codes in an effort to compare the results of the content analysis categorization. This exercise provides insight into the public interest and the types of projects citizens choose to support. Hypothesis 1: Garden and park projects are the most frequently proposed project categories.

74 64 The second hypothesis is an indicator of public interest as it relates to the projects being proposed as well as the projects that are most often fully funded. Of particular interest is whether the projects being proposed are funded at or near the same rate; in other words, whether the conveners are proposing the kinds of projects that are most likely to be successful. While this hypothesis deals with project success, the primary focus is on the types of projects being proposed and the role that the different categorizations and projects may play in project funding. This hypothesis is measured by comparing the results of the content analysis coding exercise in order to determine the most frequently proposed project categories and how successful the proposals are by category. Hypothesis 2: The most frequently proposed project categories are also the project types that are most likely to be successfully funded. Data Collection The data for the study are collected through the review of completed project documents and proposals from two of the most prominent American-based civic crowdfunding platforms. Completed projects refer to those that have exhausted their funding duration, regardless of whether fully funded or not. In addition to the successfully funded project information, data have been collected from each platform on the indexed campaigns that failed to meet the funding threshold. These data allow for further comparison between characteristics of funded and unfunded campaigns as well as the likelihood of success of civic crowdfunding projects of different origins and in different regions. Additional demographic data have been collected from the United States Census Bureau (2016). The platform data were collected over the summer and fall of 2015 and utilize a sampling frame from April 2012 through November The

75 65 beginning of this timeframe coincides with the passage of the JOBS Act for reasons previously discussed. This study uses two civic crowdfunding platforms, Citizinvestor and ioby. They are two of the most prominent platforms and are dedicated solely to civic crowdfunding projects promoting civic engagement through neighborhood improvement. Citizinvestor started in 2012 and has enjoyed a fair amount of media recognition over the subsequent years due to the platform s innovation and success in funding projects throughout the country. Citizinvestor is a for-profit organization that connects citizens to community improvement projects and ideas throughout the United States. Despite the for-profit status, Citizinvestor has partnered with a number of local governments, big (Philadelphia, PA) and small (Central Falls, RI), to promote and fund projects that focus on community improvement. In the proposals that partner directly with local government various stakeholders typically work through a community development office or similar entity in order to solicit input and develop proposals. Oversight, development, and project updates are typically then handled through the office convening the project in conjunction with other stakeholders. In instances where proposals are not directly partnered to local cities or government, community leaders propose projects which in the majority of cases still require some level of local government consent, approval, or permitting. These projects, after vetted, are officially launched on the platform with an established number of days for the campaign to reach its funding goal. After the deadline passes, if the proposal has reached its goal, the funds, which to this point are held by Citizinvestor, are released to the project convener. If the proposal does not achieve its monetary goals, the raised funds are released back to the donors. This analysis examines 53 projects proposed on the platform between 2012 and 2015.

76 66 ioby (In Our Back Yards) first launched in New York City in Much like Citizinvestor, ioby focuses on civic-oriented community improvement projects. While Citizinvestor attempted to partner with local governments, ioby took a slightly different approach by expanding in targeted cities across the country and building coalitions with community leaders and organizations in those areas. Projects on ioby tend to be a smaller in scope than those on Citizinvestor, and there are substantially more due at least in part to the fact that the platform had been around and established prior to the sampling-frame window. This analysis examines 173 project proposals made on ioby between 2012 and While there are some differences between the platforms pertaining to the number of projects, and the regional approaches; a number of commonalities exist across the two platforms used for the content analysis. These include project descriptions and proposals, which are essentially the main text and the pitch of each proposal to potential investors, and project goals and timeframes, which set forth the period in which the project must be funded. The analysis examines the combined 226 successful and unsuccessful project proposals across the two reviewed platforms. Overview of the Qualitative Analysis In order to answer the first research question on project type and also identify meaning and themes from the reviewed documents that further inform the quantitative analysis, an indepth content analysis has been performed on the 226 project proposals of completed projects across the two civic crowdfunding platforms. Content analysis is a research technique in which through careful review, interpretive meaning can be inferred from textural data (Hsieh & Shannon, 2005). Systematic and objective, content analysis is a method of analysis that allows the researcher to test theoretical issues to enhance understanding of the data (Elo & Kyngas,

77 , p. 108). By distilling a substantial amount of communications and textural data into a series of emergent and theoretically driven categories, content analysis can provide for a broad description of the phenomenon under investigation (Elo & Kyngas, 2008). The imposed structure and the data coding process serves to coherently summarize the vast number of differing project proposals into much more easily digestible micro-categories and variables that can be used to address the first research question on project type. The content analysis utilized in this design follows Krippendorff s (2012) six commonly accepted technique procedures: design, unitizing, sampling, coding, drawing inferences, and validation. These sequential steps provide a structural method for simplifying large bodies of textural data into more manageable categories aimed at understanding and explaining the phenomenon of interest (Krippendorff, 2012). While there is no universally accepted method for performing content analysis (Weber, 1990), the six commonly accepted steps listed above provide for a general process map that structures the analysis. The first step in the content analysis is conceptual design and defining the context (Krippendorff, 2012). By analyzing the data through the lens of New Public Service and extant civic crowdfunding literature, we can begin to make inferences about the observations and the linkages between the New Public Service and the success of civic crowdfunding project proposals. In addition to the empirical information collected on civic crowdfunding projects, this technique allows for the investigation of theoretical linkages that serve to inform the potential successes and failures of civic crowdfunding projects; particularly as it pertains to the effectiveness of platform engagement as well as the public interest and responsiveness. Unitizing, the second step in the content analysis, refers to the definition and identification of units of analysis in the data (Krippendorff, 2012). In this case, project proposals

78 68 across the two crowdfunding platforms examining both successful and unsuccessful (as defined by funding level) civic crowdfunding projects completed between April 2012 and July 2015 are being utilized for the analysis.. Specific project proposals, both funded and unfunded, were selected for inclusion from the two platforms provided proposals had completed their established number of days for the funding period. Sampling in content analysis is less about drawing representative samples and more about reducing the potential for organizational bias (Krippendorff, 2012). While measuring organizational bias in these projects without access to accounting records and financial documents is exceedingly difficult; the inclusion of a number of demographic statistics allows for discussion and insight into the role and impact of regional wealth, education, and poverty levels on the success or failure rates of different proposals. The fourth step, coding, involves counting and comparing the emergent patterns and themes from the directed content analysis and the guiding literature. A directed content analysis starts with a theory, the New Public Service that provides guidance for the initial codes, additional bodies of literature including crowdfunding, collaboration, and civic engagement literature provide additional context. The goal is to begin to build a theoretical framework that serves to inform the study of civic crowdfunding. By utilizing a directed analysis, a number of themes have already been identified through the literature as critical to the success of civic crowdfunding programs. These themes, which include: broad project appeal, a multifaceted marketing approach, mutual awareness, mutual benefit, participation, real-time updates, rewards, and visible problems, make up initial coding classifications. Coding started first with the Citizinvestor platform before moving onto the ioby project proposals. The coding was a straightforward exercise done by highlighting and coding existing

79 69 themes. Upon completion, codes were tallied and notes were reviewed. This resulted in the inclusion of an additional emergent variable, that of matched funds within the projects. Project proposals were then recoded to account for the additional selection. Upon finishing the recoding, each of the themes from the analysis are counted and compared in a manner that allows for interpretation of contextual meaning and comparison. In order to ensure reliability a second rater was asked to participate in the process of cross-checking the data (Creswell, 2012). This process known as inter-rater reliability serves as a means in which to check and verify accuracy of coding as well as providing an opportunity for additional refinement to increase the consistency and reliability of the qualitative analysis (Creswell, 2012). The third party was provided a copy of the codebook (see Appendix I) as well as a randomly selected, 10 percent sub-sample of the data to code (De Swert, 2012). This amounted to 23 randomly selected cases across both platforms. In order to test for coding reliability Miles and Huberman s (1994) 0.70 reliability threshold was employed. This measure compares the author coding with those derived by a third party rater with the use of the provided codebook. Miles and Huberman (1994) argue that as long as 70 percent of the codes are the same, the coding can be considered to be sufficiently reliable. Utilizing Miles and Huberman's (1994) 0.70 as the acceptable threshold, discrepancies were reviewed, tallied, and computed to have a 94.8 reliability score across the reviewed 23 case sub sample. The high rate of reliability offers sufficient confidence in the reliability and validity of the coding process necessary in order to proceed to the analysis stage. The next step, drawing inferences, is the most important step in content analysis (Krippendorff, 2012). This step involves connecting coded variables back to the constructs and phenomena of interest in order to address the research questions. The frequency within which the

80 70 coded variables appear across each reviewed project proposal determines the level of attention they receive within the analysis (Krippendorff, 2012). For the first research question on project type, an overview addresses the general process and findings of the content analysis as it relates to general project type and demographic statistics. From here the hypotheses are addressed examining the frequency within which projects are proposed and how successful they ultimately are as well as how likely conveners are to propose projects that are likely to be successful. This in turn leads in to a discussion of the potential implications of the findings and what they may mean for civic crowdfunding as well as broader concepts within the domain of public administration. The final step of the content analysis is also the most challenging: validating the results (Krippendorff, 2012). Because the technique is based on inference and not direct observation, a strong theoretical grounding in the literature is necessary to help further validate and make sense of the results (Krippendorff, 2012). Validation is attempted through discussion of the implications and conclusions addressing each research question and attempting to tie them back to the theoretical grounding by examining the potential impacts that the results reveal, not just for the field but also on a broader level and how it may affect the discipline. As a technique that has been characterized as flexible, fluid, and more art than science, content analysis is not without its critics (Weber, 1990). Directed content analysis may lead to bias and overreliance on existing theoretical constructs which in turn may minimize acknowledgement of emergent themes (Hsieh & Shannon, 2005). This weakness is also the main strength of the directed approach; specifically that existing theory can be supplemented and extended in a manner that can be particularly useful in developing fields (Hsieh & Shannon, 2005), much like civic crowdfunding.

81 71 Quantitative Analysis Methodology The quantitative analysis methodology examines project success and failure as defined by the funding levels of project proposals. The second research question on project success and the subsequent hypotheses are addressed through an analysis examining characteristics from the literature as well as emergent trends from the first research question to answer the question of what characteristics lead to both project funding success and failure. This analysis includes a core set of independent variables along with two different dependent variable models (See Figure 1). Figure 1 - Full Model(s) and Equation PROJECT COMPONENTS Request- Raised+ Category+ Volunteers+ Digital Video+ Platform+ NEW PUBLIC SERVICE Engagement+ Democratic Citizenship+ Convening Coalition+ COMMUNITY DEMOGRAPHICS Avg. Age+ Median Household Income+ Education+ Population+ Poverty Rate+ PROJECTS /PERCENT FUNDED CHARACTERISTICS OF SUCCESS Social Media+ Project Updates+ Rewards+ Matched Funds+ Community Need+ Visible Problem+ ( ) ( ) ( ) ( )

82 72 The first model explores fully funded projects as the dependent variable; the second model examines the percentage of funding achieved in project proposals as the dependent variable (see Figure 1). The two separate models highlight the impact of the independent variables on project success and also on the degree of success as measured by the percentage funded. Research Question and Hypotheses Project Success: Understanding project success can provide information on the effectiveness of new forms of engagement, such as civic crowdfunding while also revealing citizen interest and preference. In looking at success as a fully funded project, what factors influence project success? What are the characteristics of both funded and unfunded projects? Hypotheses 3-5 explore project success through the New Public Service concepts of democratic citizenship, engagement, and the presence multi-sectoral conveners. The remaining hypotheses 6 and 7 look at success through the project components of pricing and proposal category. The third hypothesis explores the importance of incorporating multiple sectors and actors. Agranoff (2006) highlights the importance of incorporating multi-sectoral stakeholders as a means to address increasingly common resource shortages and concerns. The third hypothesis explores this point by examining the impacts of multiple sectors and actors on project success. By rethinking local government revenue streams and turning to new innovative measures such as crowdfunding, it is theorized that the incorporation of multiple actors and sectors at the convening level will have a positive impact on overall success due to the resource networks that these actors bring to the table (Demediuk et al., 2012). Hypothesis 3: Project proposals convened by coalitions have a greater impact on project success than those offered by a single convener.

83 73 This fourth hypothesis explores the link between project success and engagement by examining the number of participants in a given crowdfunding campaign and the impact it has on project success. In an increasingly networked society an active, engaged citizenry is critical to collaborative governance and effective representation (Stoker, 2006). Digital and online engagement have taken on progressively more importance in recent years as society and government become increasingly connected (Zuckerman, 2014); therefore it is theorized that the more engaged a donor base a proposal has the more likely it is to be successful. Hypothesis 4: The greater engaged the public is in a given crowdfunding campaign, the more likely a project is to be successfully funded. Utilizing voter turnout as a proxy measure for the New Public Service concept of democratic citizenship, this hypothesis explores the impact of voter turnout at a county level on project success. Presuming democratic citizenship implies active interest and involvement within community governance (J. Denhardt & Denhardt, 2003) it is theorized that the more politically involved a citizenry within a proposal jurisdiction the more likely project success. In this study a jurisdiction refers specifically to the zip code and corresponding boundary lines where a project is proposed. This offers a way in which to classify and quantify the characteristics of areas where projects are proposed. Hypothesis 5: Project success is greater in areas where democratic citizenship is more prevalent. A recent study revealed that the median civic crowdfunding project funding request is $2, (Davies, 2014). This hypothesis explores whether as project pricing requests increase, the likelihood of project funding decreases. This allows for the exploration of the funding gap

84 74 and whether there may be an optimum minimum and maximum request level as well as whether or not it is a linear relationship between pricing and success. Hypothesis 6: Project pricing requests have a negative relationship with project success. Davies (2014) work explored the different proposals across a number of platforms and where they fit within a set of predetermined categories. This question expands upon the existing literature and findings from the qualitative analysis. In order to examine the impact of project type broadly as well as alleviate potential issues of small sample sizes within a given segment, each proposal has been reclassified into one of two categories, that of provided services or structural/building improvements. These two categories offer a way in which to naturally divide project proposals among services and structural building and improvement projects that allow for easier and more valid (due to small sample size mitigation) comparison. Hypothesis 7: The type of project proposal impacts the overall likelihood of success of a given proposal. Data Collection In examining project success, data collected from the content analysis, including prior theoretical constructs and additional emergent themes are examined in two separate models in order to answer the hypotheses of the second research question. The independent variables are a combination of those that emerged from the qualitative analysis, as well as previously identified variables of interest from the literature. Regional demographic statistics drawn from the United States Census Bureau add additional context to the analysis. Explanations and measures of variables can be found in Table 2, with descriptive statistics of the independent variables following in Table 3. The two dependent variable models include successfully funded projects or

85 75 projects reaching or exceeding 100 percent of funding goals; the percentage funded of projects is what percentage of a project s funding goal was actually realized. The information for this variable was collected during the content analysis, and computed by dividing the amount realized by the amount requested for a given project proposal. Table 2 - Variables and Measures Variables Measure Hypothesis Dependent Variables Percent Funded Continuous variable indicating the percent above or below a project request that a project was funded at. H3 Project Success Digital Video Volunteers Request Raised Platform: Citizinvestor ioby Category: Built Environment Services Dichotomous variable measuring project funding below 100% of the initial request as unsuccessful and anything at or above as successful. Project Components Binary variable indicating whether digital video was used in the project proposal. Binary variable indicating whether the proposal requested volunteer assistance. Continuous variable indicating the initial monetary project request amount. Continuous variable indicating the total monetary amount collected within the fundraising duration. Binary variable indicating whether a project was proposed on the Citizinvestor platform. Binary variable indicating whether a project was proposed on the ioby platform. Binary variable indicating whether a project proposal is for a structural improvement or built environment project. Binary variable indicating whether a project proposal is for a service, education, or training project. New Public Service H4, H5, H6, H7 Control Control H6 Control Control H1, H2, H7

86 76 Table 2 - Variables and Measures Engagement Continuous variable indicating the number of investors in a specific project proposal. H4 Democratic Citizenship Coalition Project Updates Social Media Visible Problems Community Need Rewards Matched Funds Median Household Income Median Age Poverty Rate (Percentage) Education (Percentage Population with Bachelor s Degree and Beyond) Population Continuous variable indicating the percent of voter turnout among voting age citizens by county in the 2012 Presidential election. Binary variable indicating the presence of multiple convening stakeholders. Characteristics of Success Binary variable indicating whether a project proposal was updated throughout the funding duration. Binary variable indicating whether a proposal utilized social media during the funding campaign. Binary variable indicating whether a project proposal links to a visible problem within the community. Binary variable indicating whether a proposal highlights and addresses an existing community need. Binary variable indicating whether a proposal offered rewards to donors. Binary variable indicating whether a proposal offered to match donor funds. Community Demographics Continuous variable indicating the median household income where a project is proposed. Continuous variable indicating the median age of citizens within the jurisdiction of where a project is proposed. Continuous variable indicating the percentage of those in poverty within the jurisdiction of where a project is proposed. Continuous variable indicating the percentage of the population with a bachelor s degree or greater within the jurisdiction where a project is proposed. Continuous variable indicating the total population within the jurisdiction of where a project is proposed. H5 H3 Control Control Control Control Control Control Control Control Control Control Control

87 77 Overview of Quantitative Analysis Table 3 - Descriptive Statistics Independent Variables Mean Standard Deviation Min. Max. Dependent Variables Percent Funded Project Success Project Components Digital Video Volunteers Request 9, , ,000 Raised 4, , ,330 Platform: Citizinvestor Ioby Category: Built Environment Services Art/Culture Community Grants Education Greening Libraries Nbhd. Improvements Parks Public Health Recycling Sustainability Walkability/Cycling New Public Service Engagement Democratic Citizenship Coalition Characteristics of Success Updates Visible Problems Community Need Social Media Rewards Matched Funds Community Demographics Median Household Income 50, , , ,574.0 Median Age Poverty Rate (Percentage) Education (Percentage Population with Bachelor s Degree and Beyond) Population 39, , ,

88 78 The quantitative analysis employs both OLS and logistic regression analyses in order to examine the impact that the explanatory variables have on both the percentage of the project funded (OLS) and overall project success (logistic). The results of each analysis are discussed together for Hypotheses 3 through 7. The OLS regression (the full model equation is listed below) utilizes percentage funded as the dependent variable and the existing and emergent themes as the independent variables. The percentage variable ranges from 0, if a campaign receives no funding, to 208 percent funded in the case of one particular project that received substantially more than had been requested (see Table 3). This dependent variable assesses the degree of impact the independent variables exhibit on percentage of project success. The logistic regression analysis examines the binary dependent variable of whether projects are fully funded and the factors that contribute to project success. Results including significant variables and factors contributing to project success and failure follow in discussion. Limitations and Delimitations The primary limitation of the study is the lack of secondary data and the discrepancies across networks and platforms regarding what data are kept and made available. This has been addressed as best possible by revisiting each of the crowdfunding platforms every month in an effort to capture and preserve what data are reported. While all reviewed are categorized as civic platforms or given the civic project tag, in a field this new, definitions and operations tend to vary from one platform to the next. This can make data collection and analysis difficult, especially when comparing data in the aggregate. Every effort has been made to address this by acknowledging wherever appropriate any potential problems with missing data, having a third

89 79 party cross-check collected data, as well as highlighting how missing or limited data may have impacted particular segments of the analysis. Delimitations of the study include the focus on two crowdfunding platforms for analysis. These two platforms were selected after careful review of projects and scope in an effort to collect as much relevant and fruitful data in the American context of civic crowdfunding as possible. By selecting only two and looking solely at American proposals, the results may be potentially limited because the number of platforms is continually increasing and a fair amount of work has been done to date in Western Europe. After some deliberation it was determined that further expanding data sources would provide limited additional utility as many are small scale platforms that support even more niche projects. Obviously, this is not the case in the decision to exclude Kickstarter from the analysis. The decision to exclude Kickstarter and other large scale platforms such as GoFundMe and IndieGoGo was made primarily due to the fact that the majority of proposals on the platforms are privately proposed and have little to do with civic issues. Of those that do address civic issues, the vast majority are individually sponsored efforts. Finally, the decision was made in sticking with the American context to sacrifice the potential for additional data in order to have results more applicable to the current situation and climate here in the United States.

90 80 CHAPTER FOUR RESEARCH RESULTS AND FINDINGS This chapter details the research results and findings of the mixed methods analysis. The chapter starts by discussing the qualitative analysis results, first providing an overview of the findings as they relate to project type, project success, and other general demographic statistics and findings. Next, the results of the content analysis addressing the first research question and hypotheses as well as potential implications and what they reveal for crowdfunding and public administration are discussed. The qualitative analysis results are followed by a discussion of the quantitative findings used in addressing the second research question on factors of success and the implications for the field and the discipline. Qualitative Analysis Results Overview by Platform This analysis utilized 226 combined project proposals from civic crowdfunding platforms Citizinvestor and ioby between 2012 and All projects are civically oriented but not necessarily proposed by or directly involving government actors. That said, the vast majority require a minimum of government cooperation or approval for permitting, zoning, and construction among other things. Of the 226 analyzed proposals, 53 came from Citizinvestor, with the remaining 173 coming from ioby. The 226 project proposals account for all proposed projects on each platform within the given timeframe. The reason for the difference between the two is that ioby was launched in 2009 and had already gained traction and built up a network within the field. On the other hand, Citizinvestor was just entering the field and working to build its network and increase social capital amongst potential localities and investors in 2012.

91 81 Table 4 - Platform Demographics Citizinvestor ioby Combined Projects Fully Funded Projects Avg. # Donors Success Rate 47% 59% 56% Avg. Request $29,270 $3,721 $9,712 Avg. Funded Project $11,594 $2,412 $4,565 Standard Deviation of 56, , , Requested Funds Standard Deviation of 31, , , Raised Funds Request Min/Max 270/293,000 40/27,639 40/293,000 Raised Min/Max 0/187,330 45/26,865 0/187,330 Most Frequently Parks Sustainability/Gardens Sustainability/Gardens Proposed Category Highest Percentage Walkability/Cycling Public Health Libraries Funded Category Most Successful Parks Community Grants Sustainability/Gardens Community Grants Sustainability/Gardens Most Unsuccessful Greening Sustainability/Gardens Sustainability/Gardens Table 4 displays the platform demographics of Citizinvestor and ioby, both platforms are similar with regard to the mean number of investors in a given project with 24 per Citizinvestor proposal and 28 for each ioby proposal (see Table 4). A chi-square test of the categorical dependent variable, project success, reveals that there is not a statistically significant relationship between platforms and project success (Chi 2 (1)=2.29, p=0.13). In order to further examine platform differences, an independent t-test examining the percent funded dependent variable was run (t(224)=4.77, p=<.001). Projects proposed on ioby have a statistically significant higher funding percentage (84.8% ± 2.77%) than those proposed on Citizinvestor (55.91% ± 6.17%). These results are further born out when examining success rate across the two platforms; Citizinvestor has a 47-percent project success rate among analyzed project proposals whereas ioby s is much higher at 59-percent. When looking at the mean requests and successful projects, the success rate differential makes some sense due to the differences between the platforms in

92 82 project funding requests, with the mean Citizinvestor request being roughly eight times more than those on ioby, $29,270 and $3,721, respectively. The numbers continue to skew, albeit not quite as heavily, when examining the mean fully funded projects between the platforms; on Citizinvestor the mean is $11,594 compared to $2,412 on ioby; when combined, the mean funded proposal is $4,565. Citizinvestor has nine requests of more than $40,000, five of which exceed $100,000 while the highest project request on ioby is less than $28,000. Some of the discrepancy between the pricing requests and funding on the two platforms can be explained by outliers, such as those mentioned above, yet there is more to it. The project pricing is much higher across the board on Citizinvestor than it is on ioby, a discrepancy not easily explained by platform fees. Citizinvestor charges an eight percent service fee to the total raised sum while ioby requires a $35 platform fee along with a three percent service charge also on the final raised amount. Some of the pricing different can perhaps be explained by the most frequently proposed project categories and how they differ across platforms. On Citizinvestor, the most commonly proposed and funded project category is that of parks; typically a much larger and costly endeavor that has a greater community reach and benefit than the smaller-scale projects. On ioby sustainability/gardens programs take the top spot; these are typically smallscale proposals geared toward neighborhood projects. Project Proposal Categories In an effort to provide insight into public interest and community responsiveness as it relates to project type, this research question asks what types of projects conveners attempt to fund through civic crowdfunding platforms and what types of projects actually get funded, specifically looking at project categories. Each analyzed platform (Citizinvestor and ioby) categorize individual project proposals, and while the majority of categories overlap, there was

93 83 some merging necessary in order to categorize all projects across the two platforms. Across the two platforms, each project was assigned into one of eleven distinct categories. The categories include: Art/Culture, Community Grants, Education, Greening, Libraries, Neighborhood Improvements, Parks, Public Health, Recycling, Sustainability, and Walkability/Cycling. A full list of the eleven categories along with descriptions and examples can be found in Table 5. Table 5 - Project Type Descriptions and Examples Category Description Example Art/Culture Art/culture projects increase community beautification while attempting to raise pride within the local community. These projects can range greatly in pricing requests. Community murals, sculptures, memorials and similar projects. Community Grants Education Greening Libraries Neighborhood Improvements Parks Community grants projects are typically one time fundraisers designed to raise awareness for a particular issue. They are usually relatively small scale and often feature community involvement beyond just monetary donation. Educational project proposals highlight a particular learning gap or educational need within segments of a community and set about addressing it. Greening projects are designed to transform mostly urban or neglected spaces into areas of community pride through the cleaning and greening of the space. Library project proposals highlight the need for increased community literacy. Neighborhood improvement projects address some particular issue within a community. They are often small scale projects that rely on the help of volunteers in addition to fundraising. Park proposals highlight the need for community recreational space. These projects can be wideranging, encompassing anything from a cookout to setup a neighborhood watch program to community hack a thons to spur local innovation. These projects highlight learning in general and can exist on many different levels from formal supplements to school curriculums to teaching skills and trades to unemployed members of the community. Typical greening projects include flower or tree planting in formerly neglected areas of the community. Library projects range from large scale supplements to community libraries and programs to micro neighborhood little free libraries. Neighborhood improvement proposals typically address blight within a community through cleanups and the formation of community associations. Proposals vary from traditional parks to skate and dog parks.

94 84 Table 5 - Project Type Descriptions and Examples Public Health Recycling Sustainability Walkability/Cycling Public health programs focus on community health needs within the community. These programs can vary in size and scope. Recycling programs attempt to build community pride by both cleaning up neglected areas and also showing how conservation techniques make both a community and environmental difference. Sustainability programs are often broad in scope and highlight community need and impact. By nature these programs are inclusive; volunteer oriented, and meant to be long lasting. Walkability/cycling programs are often large scale and fairly expensive proposals that highlight the health and environmental benefits of having such a space and infrastructure. Public health programs can vary. In some instances they seek to address a community need where segments of the population (such as the homeless) may not have access to standard preventative healthcare and measures that others take for granted. In other case it may be classes on nutrition and the benefits of maintaining an active lifestyle. One way in which recycling is highlighted is through a community art show in which participants make and design clothing entirely out of recycled materials. These programs often focus on sustainable food sources within the community from gardens to microfarms and food co-ops. Examples of these programs come in the form of increased walking and biking trails within the community. Table 6 - Projects by Category Rank Total Percent Sustainability Community Grants Art/Culture Education Walkability/Cycling Greening Neighborhood Improvements Parks Public Health Libraries Recycling n=226

95 85 The most frequently proposed project type across the two platforms is sustainability, with 47 total project proposals comprising 21 percent of the total observed projects (see Table 6). Sustainability projects include community gardening initiatives, urban farms, food co-ops, and composting efforts geared at reducing the environmental footprint of the participating communities. Community grants are the second most frequently proposed category with 38 total projects, comprising 17 percent of all observed projects (see Table 6). The third most frequently proposed projects are art/culture oriented with 12 percent of the total project proposals and 28 proposals between the two platforms (see Table 6). Many of these projects focus on public art, such as murals, sculptures, and other public displays, aimed at increasing a sense of pride and identity within the participating communities. Educational programs are the fourth most frequently proposed of the observed project categories comprising 11 percent of total proposals and 24 total projects across both platforms (see Table 6). Following educational programs for the fifth most requested proposals are walkability/cycling requests (see Table 6). Walkability/cycling requests highlight community need for walking and cycling trails, as well as other related aspects, such as bike racks and air stations. Neighborhood improvements and community greening efforts also both make up roughly 8 percent of proposed projects (see Table 6). Neighborhood improvements primarily focus on cleanup initiatives, while greening efforts are often community beautification programs planting trees and flowers in formerly neglected public spaces. Parks and public health programs tie for the 8 th most requested proposals across the two platforms (see Table 6). Parks range from new construction of playgrounds and skate parks to augmenting existing structures. Public health programs typically focus on providing assistance to at risk local populations through the provision of goods and services. Following parks and public health requests are proposals for

96 86 libraries and recycling programs that collectively total fewer than four percent of all project requests (see Table 6). Library programs include fundraising drives for local libraries, as well as construction costs and requests for local tiny libraries. Recycling programs highlight specific opportunities and projects for used material to increase conservation within proposing communities. While sustainability projects are the most frequently offered it is far from equal between the two platforms. The vast majority (45 of 47) of the sustainability projects come from the ioby platform (see Table 7). A potential explanation could be the platform s residence in New York City and its early focus on local projects before branching out across the country. Sustainability projects seem to be of particular interest in areas like New York City that are highly developed and have substantial wealth within the region. Community grants have a much more even distribution comprising 17 percent of proposals on both Citizinvestor and ioby respectively (see Table 7). Community grants can take on a variety of project proposals from community fundraisers and festivals to interpreter and informational programs. The commonality being that most of the community grants proposals are for short-term projects that often have a specific start and end date, not temporary as much as targeted. In looking at each platform individually, education programs make up 11 percent of Citizinvestor proposals and 10 percent of those done on ioby (see Table 7). These proposals often focus on supplementary school or education programs, as well as different community education and training efforts. Following education programs as the next most often proposed are walkability/cycling requests. These requests have an equal rate across both platforms making up 8 percent of requests on both Citizinvestor and ioby (see Table 7).

97 87 Table 7 - Category by Platform Citizinvestor ioby Combined Total Total Total Percent Art/Culture % Community Grants % Education % Greening % Libraries % Neighborhood Imp % Parks % Public Health % Recycling <1% Sustainability % Walkability/Cycling % Total When looking at neighborhood improvement proposals across the two platforms, it skews slightly more toward Citizinvestor while ioby tends to favor community greening efforts (see Table 7). Park requests on the other hand come almost exclusively from ioby (12 of 14 projects) while all 14 public health proposals are found on the Citizinvestor platform (see Table 7). The content analysis and the resulting scoring of the project proposals into one of the eleven individual categories highlights the popularity and frequency of particular project proposal categories over others. In addition, this exercise allows for addressing each of the hypotheses by further examining project categories to gain additional insight into the frequency with which some proposals may be offered over others. Platforms As illustrated in Table 8, there were 226 proposals in the analysis, and 127 projects were fully funded resulting in a 56 percent rate of proposal success across the two platforms. This indicates that slightly more than half of all proposed projects are successfully funded. Of the 127 fully funded proposals, 25 came from Citizinvestor and 28 of the 99 unsuccessful proposals

98 88 originated on the platform for a 47 percent success rate of Citizinvestor proposals (see Table 8). There were 173 projects proposed on ioby within the time frame, and 102 were fully funded while 71 were not, a nearly 59 percent project success rate on the platform (see Table 8). A chisquare test examining the project success dependent variable found a lack of statistical difference between platforms and project success (Chi 2 (1)=2.29, p=0.13). Of the unsuccessful proposals, twelve received at least 80 percent of their initial funding request; that is, twelve percent of the unsuccessful proposals or roughly five percent of all proposals, which indicates that most projects that are close to reaching their funding goal are able to attain the requisite support, and unfunded projects as a whole are typically receiving much less support. An independent t-test confirms the differences between the platforms related to funding percentage (t(224)=4.77, p=<.001). Projects proposed on ioby have a statistically significant higher funding percentage (84.8% ± 2.77%) than those proposed on Citizinvestor (55.91% ± 6.17%). This finding suggests that while the platforms share many similarities, there are enough differences to significantly impact funding levels. Table 8 - Successful Projects by Platform Citizinvestor ioby Total Successful Unsuccessful Total Community Demographics In addition to platforms and categories, a number of community demographics can provide further insight into the success of civic crowdfunding proposals, which as Figure 2 highlights can vary by locality, state, and region. The majority of project proposals and successes can be found in the northeast, particularly in the New York metropolitan area. The Midwest and

99 89 southern regions along with the west coast of the country are also fairly well represented, while the Great Plains and the rocky mountain region appear to be less popular with both proposals and overall project successes. Figure 2 - Geographic Distribution of Project Proposals and Successes Table 9 - Regional Project Success Region Division Fully Funded Projects Total Projects Proposed Percent Successfully Funded West % Mountain % Pacific % South % South Atlantic % East South Central % West South Central % Northeast % New England % Mid-Atlantic % Midwest % East North Central % West North Central % Note: Regional and Divisional Classification from the United States Census Bureau